Jordan: First Insurance and Yarmouk Insurance complete merger
Source: Middle East Insurance Review | Apr 2016
The merger of First Insurance and Yarmouk Insurance, the Jordanian insurance sector’s first merger in about 25 years, has been completed.
Dr Ali Al Wazani, CEO of First Insurance, said that the merger process started in April 2015 and took 11 months to complete. He described the pace as “fast”, especially since the two companies operated in different areas, reported the Jordan Times. Yarmouk Insurance offered conventional non-life insurance services while First Insurance engaged in Shariah-compliant insurance. The merged company will engage in the takaful business.
“At the beginning of the merging process, we had to reclassify Yarmouk into Islamic insurance so that the merger can be completed,” Dr Al Wazani added, noting that the capital of the new merged company stands now at around JOD28 million (US$39.5 million).
In 2015, Jordan’s Investment Council decided to offer incentives to insurance firms that are willing to merge, hoping to salvage financially troubled companies and boost the sector’s performance. The incentives include exemption from income tax for three years and waiver of fees for ownership transfers and capital increases, said Mr Ashraf Bseisu, Chairman of the new First Insurance.
“These exemptions will have a positive impact in stimulating the economy in the medium and long term,” added Mr Bseisu, who is also the representative of Bahraini Solidarity Holding which acquired 71% of the new merged company.
JOD1 = US$1.41