News Middle East25 Feb 2018

Jordan:Insurers' profitability under pressure in 2017

| 25 Feb 2018

The financial results of 24 insurance companies in the Jordanian insurance market last year were under pressure with provisional figures showing a 87% decline in profits compared to 2016.

Profits before tax and fees saw a severe setback as they plunged to JOD4.4 million against JOD34.8 million in 2016, according to preliminary data published by Jordan Insurance Federation (JOIF) for the 24 insurers.

Eight insurers reported losses in 2017, seven of which reported profits in 2016. Only two insurers were in the red in 2016. Among those which turned to red from black last year were the two largest providers in terms of GWP, Arab Orient Insurance (gig) and Jordan Insurance.

Total GWP (for operations within Jordan) grew by 2.1% to JOD594 million (US$838 million) in 2017 from JOD582 million in the preceding year. Paid claims in 2017 grew by 2% reaching JOD447 million against JOD438.5 million in the past year.

The insurance market continued to be concentrated with the top five operators controlling around 46% of the market premiums. GWP posted by the largest player, Arab Orient (gig), stood at JOD95 million last year, accounting for 16% of the market's overall premium income.

The top five insurers in terms of GWP in 2017 were:

Company GWP (JOD mln) Market share %
Arab Orient Insurance Co (gig)  95.43 16.6
Jordan Insurance Co (JIC) 63.77 10.7
Middle East Insurance Co (MEIC) 41.18  6.9
Solidarity-First Insurance Co (SFIC) 39.64 6.7
Al-Nisr Al-Arabi Insurance Co (Nisr) 34.64 5.8

Source: JOIF

The top five insurance companies in terms of profits (before tax) were:

Company Pre-tax profits (JOD)
MetLife Alico Insurance Co 4,982,348
Islamic Insurance Co (IIC) 2,592,241
Al-Nisr Al-Arabi Insurance Co (Nisr) 2,582,549
Solidarity-First Insurance Co (SFIC) 2,532,791
Jordan French Insurance Co (JOFICO) 1,871,101

Source: JOIF

Takaful

Takaful contributions in Jordan reached JOD63 million in 2017, 3.4% higher than in 2016 and accounting for 10.6% of the market GWP. Paid claims for takaful operations reached JOD41.8 million, showing an increase of 1.9% and accounting for 9.3% of the market’s total claims paid.

There are two takaful operators in Jordan: Islamic Insurance Co (IIC) and Solidarity First Insurance (SFIC). Both providers were among the top five profitable insurers in the market in 2017.

 

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