News Coronavirus watch02 Apr 2020

Jordan:Insurers likely to suffer major losses if COVID-19 crisis drags on

02 Apr 2020

The volume of work at insurers has lessened while personnel costs remain the same during the ongoing COVID-19 crisis, Mr Majed Smeirat, president of the Jordan Insurance Federation (JIF) has said.

He warned that if the situation was prolonged, the insurance sector would suffer large losses, reported Al Ghad.

He said that most insurance companies continue to provide services to customers online. He urged customers to contact their insurers in the event of the expiry of insurance policies so as to renew them and to ensure that there are no breaks in coverage.

The exception is mandatory vehicle insurance. Minister of Industry, Trade and Supply Tariq Al-Hammouri has said that compulsory auto insurance coverage would be automatically extended and premium payments suspended, provided that premiums were paid after an ongoing lockdown was lifted. The government has implemented a strict lockdown in the country to stop the spread of the coronavirus.

Mr Smeirat that there has been a significant decrease in the volume of business in other economic sectors. He said that reduced business or stoppage of work in areas such as banking, transport, the licensing of vehicles, as well as trade, is a challenge for insurance companies.

Mr Smeirat said that with insurance companies' staff working from remote locations, insurers have had to incur additional costs by having to pay for computer equipment, electronic linkages and programs.

He called on the government to exempt the insurance sector from the lockdown and allow them to open part of the time to protect the interests of citizens and the insured.

He said that employee salaries constitute about 85% of the total administrative expenses of insurance companies. In the short term, insurers would bear the costs and retain their staff. But if the COVID-19 crisis is prolonged, things will get out of everyone's control, including in the insurance sector.

There are 24 licensed insurance companies operating in Jordan.


 

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