12 March 2016
AMMAN -- Two insurance companies completed last week the sector's first merger in about 25 years.
Ali Wazani, chief executive officer of First Insurance, said merging procedures with Yarmouk Insurance started in April 2015, and needed 11 months to complete, describing the period as "fast", especially the two companies worked in different categories.
He remarked that Yarmouk did not practise life insurance and that First Insurance followed Islamic principles.
"At the beginning of the merging process, we had to reclassify Yarmouk into Islamic insurance so the merger can be completed," Wazani added, noting that the capital of the new merged company stands now at around JD28 million.
He promoted First Insurance, indicating that since it was established in 2008, the company's market share increase from 0.91 per cent to 6.48 per cent in 2015.
"With this percentage, the company last year ranked fourth among insurance companies in the Kingdom," said Wazani, who is also chairman of the Jordan Insurance Federation.
The investment council in late 2015 decided to offer incentives to insurance firms willing to merge, hoping to salvage financially troubled companies and boost the sector's performance.
As per the incentives, the government provided exemptions from income tax for three years and exempted the company from fees for ownership transfer and capital raise, said Ashraf Bsiso, chairman of the new First Insurance.
"These exemptions will have a positive impact in stimulating the economy on the medium and long terms," added Bsiso, who is also the representative of the Bahraini Solidarity Holding which acquired some 71 per cent of the new merged company.
© Jordan Times 2016