Jordan: Insurance to grow in tandem with region's stability - BMI
Source: Middle East Insurance Review | Dec 2015
The insurance market in Jordan is expected to show robust growth in both the life and non-life segments from 2015 to 2019 in terms of premiums, according to a report by BMI Research, a unit of the Fitch Group.
Gross life premiums are forecast to grow at rates of between 6.6% and 7.8% over the period to reach US$80 million this year and $100 million in 2019, while gross non-life premiums are predicted to grow by 6.4-6.8% to $720 million this year and $920 million in 2019.
However, BMI cautions that the growth is dependent upon domestic economic growth, which in turn is reliant upon regional political and security stability.
Commenting on the industry structure, the report said: “The non-life market in particular remains highly fragmented, providing scope for new entrants via local mergers and acquisitions, though the insurance industry is perhaps not yet developed enough to attract many major global providers.”
Some consolidation is taking place in the market, with shareholders at First Insurance Company recently agreeing to a proposed merger with Al Yarmouk Insurance Company, following First Insurance Company’s acquisition of a 76.25% holding in Al Yarmouk.
Health insurance will remain a key driver of growth in the non-life sector, particularly as government-provided healthcare in the country comes under increased pressure from a large Syrian refugee population, meaning that those who can afford to pay for enhanced private healthcare will be more likely to do so.