Insurance Commission
Of Jordan
The Eleventh Annual Report
Insurance Commission of Jordan / the Eleventh Annual Report_2011 1
His Majesty King Abdullah II ibn Al‐Hussein
Insurance Commission of Jordan / the Eleventh Annual Report_2011 2
“In tandem with the aforementioned political reforms, there is a set of policies, economic and developmental steps, that the government has to take in partnership with the private sector to fight poverty and unemployment, attract investments to create jobs for the youth, and improve the level and quality of services in the areas of education, higher education and healthcare. In addition, development and restructuring must continue in the fields of agriculture, energy, transport, tourism, administrative and fiscal reform. All this should be based on plans and programs outlined in the National Agenda, in order to achieve a comprehensive development that positively reflects on the living standards of citizens.”
Speech from the Throne by His Majesty King Abdullah II ibn Al‐Hussein in the opening of the second ordinary session of the Sixteenth Parliament on 26th of October 2011.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 3 Index
Introduction...... 11 Vision ...... 13 Mission ...... 13 Values ...... 13 National Goals that IC Contributes in...... 13 IC Partners in Achieving the National Goals...... 13 Strategic Objectives...... 14 Insurance Commission in Brief...... 15 The Insurance Sector in Jordan ...... 16 Jordanian Insurance Sector Structure ...... 17 Organizational Structure of Insurance Commision ...... 18 Preface by the Chairman of the Board of Directors...... 19 Preface by the Director General of Insurance Commission ...... 20
Chapter One Achievements of Insurance Commission in 2011 First: Regulating and Developing the Insurance Sector ...... 23 1. Maintaining Stability of the Insurance Sector and increasing Confidence therein...... 23 1‐1) Completing the Legal Framework of the Insurance Sector in line with the International Best Practices ...... 23
1‐2) Prudential Supervision of the Insurance Sector according to International Best Practices ...... 26
1‐3) Enhancing Insurance Sector Competence in Providing Services and enhancing its Competitiveness...... 35
2. Capacity Building of Human Resources in the Insurance Sector...... 35 3. Building Outstanding Partnerships with Local, Regional, and International Institutions ...... 36 3‐1) International and Regional Institutions...... 36
3‐2) Partnerships with Local Institutions...... 36
Insurance Commission of Jordan / the Eleventh Annual Report_2011 4 3‐3) Joint Committees to Follow up Issues Related to Insurance Companies and Companies Administrating Insurance Business Contracts with Medical Insurance Service Providers...... 37
4. Promoting Jordan as a Regional Insurance Center...... 38 Second: Maintaining a Balanced Relationship between Parties and Expanding the Insurance Coverage to include all Society Segments...... 39 1. Protecting the Rights of Insurance Policyholders and Beneficiaries...... 39 1‐1) Inquiry and Insurance Dispute Resolution Department...... 39
1‐2) Insurance Disputes Resolution Committee...... 41
1‐3) Motor Accidents Compensation Fund...... 41
2. Enhancing Insurance Awareness...... 42 2‐1) Insurance Awareness Campaign ...... 42
2‐2) News Bulletins...... 42
2‐3) Monthly Statistical Bulletins...... 43
2‐4) Insurance Commission Website ...... 43
3. Introducing National Insurance Programs and Motivating the Sector to Develop New Insurance Products with a Social Perspective ...... 43 3‐1) Micro Insurance Project ...... 44
3‐2) Professional Indemnity Insurance Project...... 44
Third: Developing Institutional Performance...... 44 1. Developing Human Resource Management...... 44 1‐1) Equality of Opportunities ...... 44
1‐2) Rewards and Incentives...... 45
2. Developing and Strengthening Staff Capacity...... 45 3. Developing and Implementing Operation Management Methodologies...... 46 3‐1) Customer Satisfaction Study ...... 47
3‐2) Renewal of ISO 9001 Certification...... 47
3‐3) Risk Management...... 47
4. Increasing Competence of Strategic Planning at Insurance Commission ...... 48
Insurance Commission of Jordan / the Eleventh Annual Report_2011 5 5. Regulating and Developing Financial Management at Insurance Commission/ Leveraging Transparency and Accountability...... 49 6. Keeping abreast with Technological Developments ...... 49 7. Social Responsibility ...... 49
Chapter Two Business Results of the Jordanian Insurance Sector For the Fiscal Year 2011 First: Economic Indicators ...... 52 Second: Business Results of Jordanian Insurance Companies for 2011...... 55 Results of Jordanian Insurance Companies for the year 2011 – Outside Branches...... 57 Third: Business Results of Insurance Supporting Service Providers 2011...... 99 Insurance Agents ...... 100 ١. Insurance Brokers...... 102 ٢. Bancassurance...... 104 ٣. Companies Administrating Insurance Business...... 106 ٤.
Chapter Three Financial Statements of Insurance Commission for 2011 First: Report of Independent Auditor...... 110 Second: Financial Statements for the Year Ending 31st of December 2011...... 112
Chapter Four Motor Accidents Compensation Fund First: Introduction...... 118 Second: Cases and Coverage Provided by the Fund ...... 118 Third: Damages not Covered by the Fund...... 119 Fourth: Administrative Framework...... 119 Fifth: Technical Framework of the Fund ...... 121
Insurance Commission of Jordan / the Eleventh Annual Report_2011 6 1. Quarterly Financial Reports of the Fund ...... 121 2. Estimated Budget of the Motor Accidents Compensation Fund ...... 121 3. Undertaking the Required Procedures to Recourse against Driver and Owner of Vehicle Causing the Accident ...... 121 Sixth: Financial Framework ...... 122 1. Revenues of the Fund...... 122 2. Reserves of the Fund...... 122 Seventh: Claims Received by the Fund...... 123 Table of Insurance Companies; Contact Information, addresses, Branches...... 126
Index of Tables
Table (1-1) Number of Onsite Visits to Insurance Companies ...... 28 Table (1-2): Number of Employees at Insurance Companies as of 31st of Dec. 2011 ...... 28 Table (1-3): Number of Approved New Products Introduced by Insurance Companies in 2011 . 29 Table (1-4): Attributes of Major Breaches Perpetrated by Insurance Companies in 2011...... 31 Table (1-5): Number of Insurance Supporting Service Providers for the Years 2007-2011...... 33 Table (1-6): Number of Onsite Visits to Insurance Supporting Service Providers (2010-2011) .. 34 Table (1-7): Number of Graduates and Certificates Awarded in (2006-2011)...... 35 Table (1-8): Number of IC’s Employees Participating in the Professional Certificate Programs in 2011...... 46 Table (1-9): Number of IC Employees Holding Professional Certificates and Diplomas ...... 46 Table (2-1-1): Total Written Insurance Premiums to GDP (in current prices) and premiums (insurance density) for 2011...... 52 Table (2-1-2): Total Written Insurance Premiums to GDP for 2010 and 2011 (Penetration Ratio) ...... 53 Table (2-2-1): Balance Sheet for the Jordanian Insurance Sector as of 31/12/2011…………….58 Table (2-2-2): Income Statement for Jordanian Insurance Sector for the Period Ended 31/12/2011………………………………………………………………………60 Table (2-2-3): Underwriting Profit (Loss) Account/Total Non Life (Inside Branches) for Jordanian Insurance Sector for the Year Ended 31/12/2011………………….….61 Table (2-2-4): Underwriting Profit (Loss) Account – Motor for Jordanian Insurance Sector for the Year Ended 31/12/2011…………………………………………………….62 Table (2-2-5): Underwriting Profit (Loss) Account – Motor Third Party for Jordanian Insurance Sector for the Year Ended 31/12/2011……………………………………………63 Table (2-2-6): Underwriting Profit (Loss) Account – Marine for Jordanian Insurance Sector for the Year Ended 31/12/2011…………………………………………………….64
Insurance Commission of Jordan / the Eleventh Annual Report_2011 7 Table (2-2-7): Underwriting Profit (Loss) Account – Aviation for Jordanian Insurance Sector for the Year Ended 31/12/2011…………………………………………………….65 Table (2-2-8): Underwriting Profit (Loss) Account – Fire and Other Damage to Property for Jordanian Insurance Sector for the Year Ended 31/12/2011…………………….66 Table (2-2-9): Underwriting Profit (Loss) Account – Liability for Jordanian Insurance Sector for the Year Ended 31/12/2011…………………………………………………….67 Table (2-2-10): Underwriting Profit (Loss) Account – Credit and Suretyship for Jordanian Insurance Sector for the Year Ended 31/12/2011………………………………68 Table (2-2-11): Underwriting Profit (Loss) Account – Medical for Jordanian Insurance Sector for the Year Ended 31/12/2011…………………………………………………….69 Table (2-2-12): Underwriting Profit (Loss) Account – Other General Classes for Jordanian Insurance Sector for the Year Ended 31/12/2011……………………………….70 Table (2-2-13): Underwriting Profit (Loss) Account/ Total Life (Inside Branches) for Jordanian Insurance Sector for the Year Ended 31/12/2011……………………………….71 Table (2-2-14): Underwriting Profit (Loss) Account/ Total Non -Life (Outside Branches) for Jordanian Insurance Sector for the Year Ended 31/12/2011…………………….72 Table (2-2-15): Underwriting Profit (Loss) Account/ Total Life (Outside Branches) for Jordanian Insurance Sector for the Year Ended 31/12/2011………………………………73 Table (2-2-16): Selected Figures for Jordanian Insurance Companies for the year ended 2011.74 Table (2-2-17): Premiums and Claims per Insurance Class for the Year Ended 2011…………76 Table (2-2-18): Selected Figures for Jordanian Insurance Sector for the Last Ten Years ………78 Table (2-2-19): Insurance Business Licenses Table …………………………………………….79 Table (2-2-20): List of Licenses Given to Insurance Companies ……………………………….80 Table (2-3-1): Progression of the Insurance Agents’ Business ...... 101 Table (2-3-2): Active Insurance Brokers to Non-Active Brokers ...... 103 Table (2-3-3) Progression of Insurance Brokers Production...... 103 Table (2-3-4): Progression of Bancassurance Production in 2007-2011...... 105 Table (2-3-5): Consolidated Balance Sheet of Companies Administrating Insurance Business as at 31st of Dec. 2011...... 107 Table (2-3-6): Income Statement for Companies Administrating Insurance Business for the Year Ending 31st of Dec. 2011...... 108
Insurance Commission of Jordan / the Eleventh Annual Report_2011 8 Index of Figures Figure (1 ‐1): Numbers of Complaints and Settlements for 2007‐2011...... 40 Figure (1 ‐2): Motor Complaint Index for 2011 – Companies with the Fewest Complaints ...... 40 Figure (1 ‐3): Progression of Complaint and Settlement Numbers by the Insurance Dispute Resolution Committee for 2007‐2011...... 41 Figure (1 ‐4): Progression of Numbers of Claims and Settlements submitted to the Motor Accidents Compensation Fund for 2007‐2011 ...... 42 Figure (1 ‐5): Equal Opportunities: Percentage of Females Employees to Total Employees for 2009‐ 2011...... 45 Figure (1 ‐6): Realized Customer Satisfaction for 2009‐2011 ...... 47 Figure (2 ‐1‐1): Insurance penetration: Total Written Insurance Premiums to GDP (in current prices) for 2007‐2011 ...... 52 Figure (2 ‐1‐2): Monthly Prices indices of Insurance sector Compared with the Banking and Financial Sector (the Free Float Weighted Index) for the Years 2008‐2011 ...... 54 Figure (2-2-1): Jordanian Insurance Sector Growth 2002 – 2011………………………………..81 Figure (2-2-2): Gross Written Premiums / Gross Claims Paid for Jordanian Insurance Sector for the Year 2011 …………………………………………………………………….82 Figure (2-2-3): Net Retention of Insurance Companies for Jordanian Insurance Sector for the Year 2011………………………………………………………………………….83 Figure (2-2-4): Gross Written Premiums for the Year 2011…………………………………….84 Figure (2-2-5): Gross Claims Paid for Jordanian Insurance Sector for the Year 2011…………85 Figure (2-2-6): Technical Profit and Loss for Jordanian Insurance Sector for the Year 2011….86 Figure (2-2-7): Total Jordanian Insurance Sector Investment for the Year 2011………………87 Figure (2-2-8): Total Assets per Company for the Year 2011 …………………………………88 Figure (2-2-9): Net Profit before Tax per Company for the Year 2011 – Highest Ten Companies………………………………………………………………………….89 Charts representing the market share for the largest 10 insurance companies …90 Figure (2-2-10): Gross Written Premiums for Jordanian Insurance Market for the Year 2011…91 Figure (2-2-11): Gross Written Premiums/Motor for the Year 2011……………………………92 Figure (2-2-12): Gross Written Premiums/Marine and Transport for the Year 2011…………….93 Figure (2-2-13): Gross Written Premiums/Fire and Other Damage to Property for the Year 2011………………………………………………………………………………..94 Figure (2-2-14): Gross Written Premiums/Liability for the Year 2011…………………………..95 Figure (2-2-15): Gross Written Premiums/Medical for the Year 2011………………………….96 Figure (2-2-16): Gross Written Premiums/Other General Insurance Classes for the Year 2011..97 Figure (2-2-17): Gross Written Premiums/ Total Life Assurance for the Year 2011 ……………98 Figure (2 ‐3‐1): Written Insurance in 2011 (as per Distribution Channels)...... 99
Insurance Commission of Jordan / the Eleventh Annual Report_2011 9 Figure (2 ‐3‐2): Progression of the Number of Insurance Agents ...... 100 Figure (2 ‐3‐3): Number of Insurance Agents at Insurance Companies...... 101 Figure (2 ‐3‐4): Insurance Agents Production per Insurance license for 2011...... 102 Figure (2 ‐3‐5): Progressive Numbers of Insurance Brokers ...... 103 Figure (2 ‐3‐6): Insurance Brokers Production per Insurance License for 2011...... 104 Figure (2 ‐3‐7): Progression of Bancassurance Production ...... 105 Figure (2 ‐3‐8): Bancassurance Production per Insurance Type for 2011...... 106 Figure (4 ‐1): Claims Received by the Fund in (2005‐2011) ...... 124 Figure (4 ‐2): Indemnities Paid by the Fund in 2005‐2011...... 125 Figure (4 ‐3): Details of Indemnities Paid by the Fund in 2010‐2011...... 125
Insurance Commission of Jordan / the Eleventh Annual Report_2011 10
Introduction
Insurance Commission of Jordan / the Eleventh Annual Report_2011 11 Board of Directors
Chairman Minister of Industry and Trade HE Dr. Shabib Farah Ammari1
Vice Chairman HE Ms .Rana Tahboub2
Members of the Board HE Dr. Ma’en Nsour HE Dr Adel Sharkas3 Dr. Omar Al-Jazi Mr. Nasha’t Masri4 Mr. Nazzal Al-Armouti
1 Succeeded HE Mr. Sami Gammoh as from 2nd of May 2012. 2 Assumed this position as from 1st of July 2012. 3Succeeded HE Mrs. Kholoud Saqqaf as from 9th of July 2012. 4 Succeeded HE Mr. Fawwaz Ghanem as from 4th of December 2011.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 12
Vision
The Insurance Commission is striving to be a pioneer in regulating and developing the insurance sector so that Jordan becomes a leading regional center for insurance.
Mission
The Insurance Commission is a public institution aiming for protecting the rights of the insured and developing insurance services in the Kingdom.
Values
Transparency Neutrality and Objectivity Excellence Teamwork Spirit Continuous Training Fairness and Equal Opportunities Confidentiality of Information Cooperation Encouraging Competitiveness National Goals that IC Contributes in
Participating in the growth of the Jordanian Economy through sustaining financial stability. To Contribute in Providing Social Protection.
IC Partners in Achieving the National Goals
Ministry of Industry and Trade Jordan Securities Commission Jordan Insurance Federation Central Bank of Jordan Companies Control Department Social Security Corporation Ministry of Finance/Income and Sales Tax Department
Insurance Commission of Jordan / the Eleventh Annual Report_2011 13 Strategic Objectives
First: Regulating and Developing the Insurance Sector
Policies:
1. Maintaining stability of the insurance sector and increasing confidence therein 2. Capacity Building of human resources in the insurance sector. 3. Building outstanding partnerships with local, regional and international institutions. 4. Promoting Jordan as a regional insurance center.
Second: Updating and Developing Insurance Commission’s Internal Operations on a Continuous Basis
Policies:
1. Developing institutional performance. 2. Keeping abreast with Technological Developments.
Third: Maintaining a Balanced Relationship between Insurance Parties and Expanding Insurance Coverage to include all Society Segments
Policies:
1. Protecting the rights of insurance policyholders and beneficiaries. 2. Enhancing insurance awareness across the public. 3. Introducing national insurance programs and motivating the sector to develop new insurance products with a social perspective.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 14
Insurance Commission in Brief
The Insurance Commission (IC) is a public institution aims at protecting the rights of the insured and developing insurance services in the Kingdom. It was established at the end of 1999 by virtue of the Insurance Regulatory Act No. (33) of 1999 to regulate and supervise the insurance sector as well as enhancing the role of insurance sector and its contribution to the national economy, it also aims at mobilizing, developing and investing national savings in support of economic development in the Kingdom by the following means:
Protecting rights of the insured and beneficiaries of insurance business as well as monitoring solvency of insurance companies to provide adequate insurance coverage to help protect these rights. Improving the performance and efficiency of insurance companies, and enforcing the implementation of professional codes and ethics that would improve the ability to provide better services to beneficiaries of insurance policies and maintain positive competitiveness amongst insurance companies.
Capacity Building: Equipping individuals with the necessary skills, knowledge, and training that enable them to transact insurance business by various means including the establishment of an institute for this purpose.
Enhancing insurance awareness, and preparing and disseminating relevant studies and research papers and make these available for the public.
Strengthening the cooperation and integration links with insurance supervisors in the Arab world and worldwide.
Accordingly, IC set its strategy for the years 2009-2012 to complement its strategy of 2006-2008. In this strategy, IC identifies its vision, mission, and values governing its business. IC identifies, as well, the national goals it contributes in, its strategic objectives, policies, institutional objectives, and targeted performance indicators. These have already been translated into annual plans of action.
IC Board of Directors consists of the Minister of Industry and Trade as Chairman, the Director General as Vice-chairman, and five Jordanians known for their experience and competence in the financial and economic sectors especially in the insurance sector. Two of whom are from the public sector and three from the private sector- one of them is nominated by the Jordan Insurance Federation provided he/she is from outside the insurance sector. All members are appointed by the Council of Ministers pursuant to a recommendation by the Chairman for a four-year term renewable for the same term. The Board assumes tasks and powers provided for in
Insurance Commission of Jordan / the Eleventh Annual Report_2011 15 the Insurance Regulatory Law No. (33) of 1999; and regulations and instructions issued pursuant thereto including:
. Setting the general policy of the Commission and approving plans and programs necessary for its implementation. . Approving draft legislation related to the insurance sector and submitting them to the Council of Ministers.
. Issuing Instructions required to implement the provisions of the Act and Regulations issued pursuant thereto.
. Approving the annual draft budget of the Commission and submitting it to the Council of Ministers for endorsement.
. Approving the annual report and annual statement of accounts of the Commission and submitting them to the Council of Ministers.
. Appointing a certified auditor and determining his/her remuneration. . Any other tasks relevant to the Commission affairs and its objectives.
The Insurance Sector in Jordan
The Insurance Sector consists of (28) insurance companies licensed to practice insurance business inside Jordan; one company is licensed to practice life insurance business, (11) to practice non life insurance and (16) to practice both (Life and Non Life insurance - Composite). In addition, two non – operating foreign insurance companies in the Kingdom (Regional//Representation Office) are subject to the Commission’s supervision.
As at the end of 2011, there are (870) insurance supporting service providers under the Commission’s supervision as follows: (583) insurance agents, (114) insurance brokers, (15) reinsurance brokers, (56) loss adjusters and surveyors, (15) actuaries, (29) insurance consultants, (1) coverholder, (15) companies administrating insurance business, 10 Banks licensed to practice bancassurance, in addition to (32) non resident reinsurance brokers were approved to practice reinsurance brokerage business inside the Kingdom.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 16 Jordanian Insurance Sector Structure
th * Life Assurance License was annulled on 25 April 2011 ** Insurance business License was annulled on 3rd January 2012
Insurance Commission of Jordan / the Eleventh Annual Report_2011 17 Organizational Structure of Insurance Commision
Insurance Commission of Jordan / the Eleventh Annual Report_2011 18 Preface by the Chairman
Insurance is a vital factor for providing socio-economic protection to Jordanian citizens and businesses, being a risk management tool that provides indemnity on covered losses, which ensures financial stability and the national economy.
In addition, the insurance industry is a source of national savings and insurance companies -as institutional investors- provide long term capital for financing economic projects, and hence encompasses potential for investment and economic growth.
Regulation and development of insurance business and enhancing public confidence therein are of great interest to the government. To materialize this interest, the Insurance Commission prepared a draft law "The Insurance Law" to serve as a comprehensive legislative framework for insurance in the Kingdom, addressing the principles and provisions of insurance contracts and developing insurance business and improving its competitiveness. The government is also keen on protecting the rights of policyholders and beneficiaries of insurance policies, giving special attention to enhancing their insurance awareness.
To achieve these goals, the Commission supports the introduction of new insurance products and programs that meet societal and economic needs, such as life assurance, private pension, professional indemnity insurance, microinsurance, private medical insurance for workers in the private sector, and compulsory fire and earthquake insurance for the industrial, commercial and governmental institutions and for households.
On the other hand, the Commission has long acknowledged the significance of compulsory motor insurance in providing protection for those affected by motor accidents,. Therefore, relevant legislations are subject to a continuous revision upon the outcomes of practical applications of this insurance line. In this regard, the Commission Board decided to allow insurance companies to freely underwrite compulsory motor insurance as of January 2013 and directed the Commission to conduct technical studies to establish the regulatory framework necessary to ensure an optimal application of this liberalization taking into consideration the interests of all parties.
Finally, we will continue exerting efforts to advance this vital component of Jordanian economy, guided by the progressive visions of His Majesty King Abdullah II ibn Al-Hussein (May God Bless Him).
Dr. Shabib Ammari Minister of Industry and Trade Chairman of Insurance Commission
Insurance Commission of Jordan / the Eleventh Annual Report_2011 19 Preface by the Director General of Insurance
Commission
It is my pleasure to present the annual report of the Insurance Commission (IC) for 2011 which include milestones achieved in the year and towards realizing IC’s objectives to regulate and develop the insurance sector. The report provides an overview of the insurance sector, results of the Jordanian insurance sector, in addition to the financial statements of the Commission and the annual report of the Motor Accidents Compensation Fund.
In 2011, IC efforts in enacting and developing the legal framework included several components; mainly, compulsory insurance against fire and earthquake risks for economic entities, industrial and commercial enterprises, and the official and public institutions. The Commission regulated Takaful insurance business as well as the investments related to the contributions paid by the Takaful policyholders. In addition, IC regulated annuity and management of pension funds as well as establishing the core requirements to be included in such annuity policies; and relevant disclosures and explanatory notes. Thus, the provision of the necessary legal framework will help create the business environment necessary for developing the insurance sector including annuity and Takaful insurance business.
As the Commission appreciates the importance of the compulsory motor insurance and its significant contribution in providing social protection as well as indemnifying motor accidents injured parties, in addition to its direct impact on insurance companies as motor insurance premiums mounted to 29%1 of total insurance premiums for 2011, And pursuant to a continuous review process, the Commission introduced amendments to the compulsory motor insurance in order to strike a balance among the three parties of the insurance policy (the insurance company, the insured and the beneficiary); regulated the principles of settling indemnities related to motor insurance and ensured an easy and smooth access to insurance policy.
The annual report sheds light on the financial, technical and legal supervision over insurance companies and insurance supporting services providers that the Commission implements to verify insurance companies solvency and their capacity to fulfill their financial obligations. In addition to the extent these companies observe, in their operations, the ethical and professional codes of conduct, corporate governance principles, and other relevant legislations. The Report includes, as well, major preventive and corrective measures IC implemented in 2011.
Despite the international crisis and local economic developments have resulted in negative impacts on the insurance Sector, yet the insurance sector has
1 Preliminary data
Insurance Commission of Jordan / the Eleventh Annual Report_2011 20 achieved a growth rate of 6.9%.1 This calls on all of us, as an insurance commission and insurance sector, to perform the necessary analysis and studies in order to reach appropriate solutions that would help enhance the role of insurance sector and motivate the insurance companies to merge and strengthen their solvency in line risks undertaken whilst strengthening their corporate governance.
In order to maintain a balanced relation among insurance parties, IC pursued its efforts to provide methods and mechanisms to process and settle insurance disputes whether through the Commission or the Insurance Dispute Resolution Committee. This Report lists insurance companies with outstanding performance based on the complaint indicator of motor insurance and indicates changes in insurance companies' licenses.
Finally, this Report illustrates main activities of the Motor Accidents Compensation Fund in 2011. The Fund was established to secure compensation to injured parties of motor accidents in cases where those do not have insurance coverage; whether the responsible party was unknown (Anonymous claims) or did not hold compulsory Motor insurance policy. The Fund settled eligible claims and total indemnities paid through the Fund mounted to JD (606) thousand in 2011, while Total indemnities paid since the Fund inception in 2004 till the end of 2011 mounted to JD (1.5) million, and the Fund, during the same period, received (284) claims from motor accident injured parties. As a final note, the IC will continue to exert efforts in to advance this vital and major component of our Jordanian economy under the leadership of His Majesty King Abdullah II ibn Al-Hussein (May God Bless Him).
Rana Tahboub
Director General
1 Preliminary Data
Insurance Commission of Jordan / the Eleventh Annual Report_2011 21
Chapter One
Achievements of Insurance Commission in 2011
Insurance Commission of Jordan / the Eleventh Annual Report_2011 22 1.
First: Regulating and Developing the Insurance Sector
1. Maintaining Stability of the Insurance Sector and increasing Confidence therein
1-1) Completing the Legal Framework of the Insurance Sector in line with the International Best Practices
Since its establishment, Insurance Commission (IC) has been keen on drafting legal frameworks to regulate the insurance Sector. In 2011, the Commission furthered these efforts to develop the supervisory, legal, technical, and financial issues and principles for the operation of insurance companies and other insurance supporting service providers. Following are the main components that the Commission worked on during the year.
1- 1- a) Providing Insurance Coverage against Fire and Earthquakes for Economic Entities
In order to provide economic stability in the Kingdom and protect owners and occupants of economic entities from risks that they might face beyond their expectations, and as a result incurring non-tolerant losses, the Compulsory Insurance against Fire and Earthquakes Regulation No. (21) of 2011 was issued to the effect of having all industrial and commercial enterprises, government – owned and public institutions obtain insurance coverage against fire and earthquakes hazards.
Accordingly and in light of discussions with the stakeholders, the Commission has early in year (2012) prepared an amended draft regulation of the Compulsory Insurance against Fire and Earthquakes in order to achieve an optimal enforcement of the regulation and fulfill its purposes. In addition, in cooperation with related stakeholders, the Commission is currently working on setting the technical framework required for enforcement of this regulation.
1- 1- b) Regulating Takaful Insurance
In line with the role that IC assumes in regulating, developing, and supervising all issues related to insurance business in the Kingdom; and in order to set the legal framework to regulate business of insurance companies licensed to do the Takaful insurance business according to the provisions of the Islamic Shari'a and its
Insurance Commission of Jordan / the Eleventh Annual Report_2011 23 principles in all their operations including their insurance and investment activities, instructions No. (1) of 2011 were issued.
The instructions regulate Takaful insurance business and investments related to subscriptions that the policyholders pay to Takaful insurance companies on a wakala or mubadala model; or both in accordance with the provisions of the instructions and those of the Islamic Shari'a rules. Pursuant to these instructions, a Takaful insurance company is required to include in the insurance policy a paragraph including the major principles and rules of Takaful insurance as applied by such companies when dealing with subscribers. The instructions include provisions related to the Shari'a supervisory board in terms of requirements to be fulfilled by its members; method of appointment and dismissal from office; mandate of the Shari'a supervisory board and powers delegated thereto.
Other provisions identify the method to manage financial accounts of Takaful company and accounts the company must held in order to separate the capital accounts of the equity owners from the account of policyholders as well as the provisions related to the Takaful insurance surplus and its distribution. Other provisions relate to reinsurance. In addition, the governance committee is established at the Takaful insurance company in order to maintain balance between the subscribers’ (policyholders) interests and those of equity owners within a Takaful insurance company.
1- 1- c) Regulating Annuities and Management of Pension Funds
In line with the vision of IC which recognizes the importance of developing life insurance business and specifically annuities, the Commission issued the instructions regulating annuities and management of pension funds. These instructions include several provisions that ensure appropriate supervision over insurance companies introducing this type of insurance such as required disclosures and explanatory notes provided to policyholders as well as core conditions that must be incorporated into annuity policy and obligations of the company conducting such business.
Management of pension funds instructions provide for requirements that must be fulfilled to license an insurance company to manage annuities whether to its own account or on behalf on another insurance company, financial institution, or investment fund that provides the annuity product and contracts the company to manage the business of such a product, in addition, the instructions includes provisions related to supervision over insurance companies conducting such business.
1- 1- d) Applications of Compulsory Motor Insurance
As IC appreciates the importance of compulsory motor insurance as a mean for indemnifying motor accidents injured parties for damages caused by an insured
Insurance Commission of Jordan / the Eleventh Annual Report_2011 24 vehicle, in addition to its significant share as it mounted to 29%1 of the total insurance portfolio for 2011 and covered about 1.1 million vehicles, the Commission introduced amendments to the compulsory motor insurance in order to achieve balance among the three parties of the insurance policy (the company, the insured, and the beneficiary).
The amended legislations provide for reimplementation of the "excess amount" which is the amount of money that needs to be paid by an insured when a claim is filed, in order to have the owner and driver causing the accident share the responsibility for the accident.
In order to secure an easy access to the motor insurance policy, instructions of the Compulsory Unified Insurance Office were amended in order to have the Compulsory Unified Insurance Office, and through its branches in all departments of licensing drivers and vehicles, as the only agency authorized to issue policies of compulsory motor insurance, by going back to the queuing system for insurance companies when issuing insurance policies.
In addition, The IC regulated the technical issues related to indemnities of compulsory motor insurance through Decision No. (6) of 2011 which established the principles to settle indemnities for damages caused to vehicles. The decision regulate indemnity for the “loss of value” resulting from an accident, and limit the insurance company liability for loss of value to 10% of the vehicle value at the time of accident. In addition, the liability of the insurance company for “Loss of use” is identified for damaged vehicles as per type and model, “loss of use” is the amount paid to the victim of a motor accident caused by a vehicle covered with compulsory motor insurance in order to make up for the time required to fix the vehicle due to the accident.
However, regulations related to compulsory insurance are subject to a continuous and progressive review in response to the practical applications. IC will conduct technical studies in near future to establish the controls and requirements necessary to allow insurance companies to freely underwrite the compulsory motor insurance to secure an optimal implementation that consider interests of all related parties.
1- 1- e) Amendments to the Forms of Financial Reports and Statements
In order to keep pace with the International Accounting Standards (IAS) and the International Financial Reporting Standards (IFRS), the Commission amended the financial statements of insurance companies to be in line with the purposes of interim financial statements (semi annual).
1 Preliminary data
Insurance Commission of Jordan / the Eleventh Annual Report_2011 25 1-2) Prudential Supervision of the Insurance Sector according to International Best Practices
1- 2- a) Regulating and Supervising Insurance Companies
The Insurance Commission (IC) conducts offsite supervision and onsite visits on insurance companies to verify their solvency and ensure their ability to fulfill their financial obligations and adherence to the rules of professional conduct and ethics, corporate governance principles, and preventive measures to combat money laundering in insurance activities, and compliance with the provisions of law, relevant regulations, and instructions.
i) Offsite Supervision of Insurance Companies
IC pursued further implementation of the Supervisory Ladder in 2011 as a standard to assess risks based on capital adequacy, asset quality, reinsurance, adequacy of technical provisions, management, earnings quality, liquidity, and subsidiaries and associate companies. This approach intensifies supervision on sources of risk in a company (risk based approach) which is a successful and more effective method to achieve the highest level of supervision on insurance companies. The Technical and Financial Supervision Department implements this supervisory approach which entails the analysis of quarterly statements submitted by insurance companies in order to secure continuum and more viability for this project.
IC monitors and evaluates insurance companies’ status and implements mechanisms that enable them to obtain prompt indicators. Following are the particular steps that IC undertakes to this effect:
Validate commitment of insurance companies to the capital adequacy standard (solvency margin) which is applied on a quarterly basis in order to verify solvency status of these companies and secure their capacity to fulfill their financial obligations and take legal procedures against non- compliant companies as illustrated in the Clause “Preventive and Corrective Procedures by the Commission”. Examine annual financial statements of insurance companies and grant a “no-objection” notice to disclose it to ensure their compliance with accounting and templates legislations and compliance with developments in International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS); this helps enhance transparency level and credibility of insurance companies and increase while providing comparable financial reports. Examine quarterly financial statements. Monitor implementation of the best international practices related to the management of investments of insurance companies through the following:
Insurance Commission of Jordan / the Eleventh Annual Report_2011 26 Review adopted investment policy for each company annually, and compare the same with actual investments of the company to ensure conformity. The Commission examines the investment policy and actual investments to ensure compliance with relevant legislations and investment diversification to mitigate risks, in addition to avoiding concentration of investments in high risk areas, violating companies are followed to correct their status.
Hold meetings with financial managers of insurance companies to discuss remarks of IC in relation with investments of companies in order to remove the violation and undertake corrective actions.
Review reinsurance treaties conducted by insurance companies and ensure sound and strong financial and administrative positions of the reinsurance companies with which the local insurance companies deals and verify adherence to relevant instructions to secure rights of the insured. Monitor the corporate performance of insurance companies to establish its conformity with the rules of sound corporate governance in order to progressively improve such performance and achieve good governance. The IC reviews insurance companies’ adopted policies and systems required by different legislations issued by the IC relating to their boards of directors, executive management, internal audit and control systems, risk management and the audit committee. Renew licenses of insurance companies on an annual basis after considering the renewal applications and verifying their fulfillment of conditions and requirements provided for in the legislation enacted by the Commission. Monitor insurance companies’ adherence to provisions of instructions No. (27) of 2010 and their amendments which govern the underwriting volume in compulsory motor insurance business to ensure insurance companies ability to fulfill their financial obligations. Total premiums of compulsory motor insurance for Jordanian vehicles must be (5%) at least and (75%) maximum of total shareholders’ equity of the company operations inside the Kingdom. Accordingly, in 2011 the Commission stopped eight insurance companies from underwriting compulsory motor insurance for the Jordanian vehicles as they exceeded the maximum ceiling permissible for underwritten volume.
ii) Onsite visits of Insurance Companies
In line with the Risk Based Approach, IC implemented onsite visits to evaluate the position of companies and verify their compliance with related legal and supervisory frameworks. The IC attempts to focus on risky areas and finding solutions for those problems. Accordingly, IC conducted onsite visits on (16) companies in 2011 according to the approved inspection plan.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 27 Table (1-1) Number of Onsite Visits to Insurance Companies Number of Onsite Visits s to Insurance Companies 2010 2011
1. Onsite Visits a. According to the Inspection Plan 19 16 b. Unplanned 1 4 2. Short onsite visits relevant to a specific topic 2 28
In these onsite visits, IC monitored the actual implementation of know your client procedures and ensured that there are preventive controls in place to avoid violation of such procedures. The IC requires external auditors’ testimony on compliance of insurance companies in order to establish companies' commitment to implementation of anti money laundering and counter terrorist financing in insurance activities instructions.
iii) Approving senior employees of insurance companies
In order to verify competence and experience of senior employees of insurance companies, IC considers credentials and qualifications of such employees before granting approval on their appointment.
Table (1-2): Number of Employees at Insurance Companies as of 31st of Dec. 2011 Number of Number of senior Company Employees employees Arab Union International Insurance Co. 53 13 Holy Land Insurance Co. 57 15 Jordan International Insurance Co. 91 11 Jordan French Insurance Co. 99 20 American Life Insurance Co. (ALICO) 102 14 Al‐Manara Insurance Co. 65 18 Jordan Insurance Co. 177 6 Islamic Insurance Co. 122 20 General Arabia Insurance Co. 66 13 The National Insurance Co. 60 15 Middle East Insurance Co. 147 10 Arab Orient Insurance Co. 235 31 The Arab Assurers Co. 75 15 Arab Life and Accident Insurance Co. 176 19 Arab German Insurance Co. 103 15
Insurance Commission of Jordan / the Eleventh Annual Report_2011 28 Number of Number of senior Company Employees employees Al Barakah Takaful Insurance Co. 34 6 Jerusalem Insurance Co. 106 9 The United Insurance Co. 54 11 Mediterranean and Gulf Insurance Co. 35 8 Arab Jordanian Insurance Group Co. 62 12 Euro Arab Insurance Group Co. 100 13 Al Nisr Al‐Arabi Insurance Co. 190 15 Jordan Emirates Insurance Co. 71 15 Yarmouk Insurance Co. 48 12 Gerasa Insurance Co. 14 10 Delta Insurance Co. 47 11 Philadelphia Insurance Co. 42 8 First Insurance Co. 61 10 TOTAL 2.492 375
iv) Approvals of New Insurance Products
IC examines new insurance products and approves them after verifying insurance policies’ clarity of terms and that these are in line with the Insurance Regulatory Act; regulations, instructions, and decisions issued by virtue thereof. IC also reviews and verifies the underwriting principles of these products to ensure premiums are set according to sound actuary principles. In 2011, the Commission approved (24) new products introduced by several insurance companies.
Table (1-3): Number of Approved New Products Introduced by Insurance Companies in 2011 Number of New Products for Each Insurance License in 2011
Company Credit and Other Suretyship General Total Motor Liability Insurance Medical Insurance Holy Land 1 1 Jordan International Insurance Co. 1 1 First Insurance Company 2 2 Al Barakah Takaful Insurance Co. 1 1 General Arabia Insurance Co. 2 1 1 The National Insurance Co. 2 2 Arab Orient Insurance Co. 2 1 1
Insurance Commission of Jordan / the Eleventh Annual Report_2011 29 Number of New Products for Each Insurance License in 2011
Company Credit and Other Suretyship General Total Motor Liability Insurance Medical Insurance The Arab Assurers Co. 2 1 1 Arab Life and Accident Insurance Co. 4 3 1 Arab Jordanian Insurance Group Co. 1 1 Euro Arab Insurance Group Co. 1 1 Al-Manara Insurance Co. 2 2 Al-Nisr Al-Arabi Insurance Co. 2 1 1 Delta Insurance Co. 1 1 Total 24 6 1 3 3 11
v) Granting and Revoking Insurance Licenses
IC considers applications to obtain insurance licenses to ensure fulfillment of conditions and requirements provided for in relevant legislation. Thus, the IC Board of Directors granted the Mediterranean and Gulf insurance Company (MedGulf) a license to transact General Insurance business; ships insurance class and ships liability insurance class, and on 6th of April 2011, IC granted the Jordan International Insurance Co. motor insurance license, these licenses were granted in addition to other licenses granted to both companies1.
On the other hand, IC Board of Directors revoked in 2011 the life insurance license granted to Arab Assurers Co. in response to a request by the Company which will continue to transact general insurance business. In response to requests by both companies, the Board revoked motor insurance license and land motor vehicles liability insurance class granted to Al-Nisr Al-Arabi Company and Yarmouk Insurance Company. However, they kept the license of general liability insurance class which falls under the liability insurance license. This resolution entered into force as from 12th of Dec. 2011 and 1st of Jan. 2012 respectfully.
vi) Preventive and Corrective Measures by IC
Based on the results of onsite and offsite inspection, the areas of breach were identified, violation reports were issued and financial fines were imposed on non- compliant companies according to the provisions of the Insurance Regulatory Act No. (33) of 1999 and its amendments, regulations and instructions issued by virtue thereof. The Commission followed companies involved in these breaches to undertake corrective action and remedy violation.
1 Jordan International Insurance Co motor insurance license was annulled on 13th of March 2012.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 30 Table (1-4): Attributes of Major Breaches Perpetrated by Insurance Companies in 2011 Number of Type of Breach Description of Major Breaches Breaches The Company did not submit the required statements to the Commission during the Breach of the Insurance Regulatory Act 1 6 legal interval of time (financial statements No. (33) of 1999 and its amendments and supervisory forms, the actuary certificate) Breach of Compulsory Motor Insurance 2 1 Regulation No (12) of 2012 Breaching the code of conduct and professional ethics when dealing with a Breach of Professional Code of Conduct reinsurer. 3 and Ethics for Insurance Companies No. 2 Selling insurance policies without (9) for 2004 and their amendments obtaining approval of the Commission or other than the approved policy wording. The Company did not adhere to the minimal requirement of the number of Breach of Corporate Governance for independent members of the Board of 4 insurance company Instructions No. (2) 2 Directors. of 2006 and their amendments. The Company did not fill in the vacancy of internal auditor during the legal interval of time. Breach of Licensing and Regulating the Business and Responsibilities of an 3 ٥ Insurance Agent instructions No. (1) of 2005 and the Amendments Thereof. Breach of Instructions of the Basis of Investing the Funds of the Insurance The Company sold/purchased assets from a Company and Determing the Nature and senior employee in the Company without 6 the Location of the Insurance 2 obtaining a prior approval from the Company’s Assets that Match its Commission. insurance obligations and the Amendments Thereof No (1) of 2006 The Company dealt with an insurance pool Breach of Reinsurance Instructions No. classified in the fourth category without 7 1 (4) of 2002 and their Amendments obtaining prior approval from the Director General of IC. The Information System in the Company fails to maintain a comprehensive database Breach of Computerization of the including all usages of information systems 8 business of insurance companies 1 to be easily accessed and reviewed by the instructions No. (2) of 2004. Commission when implementing its regulatory and supervisory role. TOTAL 18
In conformity with the provisions of the Insurance Regulatory Act No. (33) of 1999 and its Amendments, IC Board of Directors suspended on 6th.of April 2011 the license of Arab Assurers Company. Accordingly, the Company shall be prohibited from issuing new insurance policies as from the date of license suspension, and all
Insurance Commission of Jordan / the Eleventh Annual Report_2011 31 rights and obligations arising from policies issued prior thereto shall be deemed as valid and the company shall be liable for them. In addition, the company shall be prohibited from disposing any of its investments and fixed assets unless obtaining a prior approval from IC. However, the IC approved the company to transact general insurance on 25th of April.2011 after embarking on the first phase of a recovery plan.
Moreover, IC Board suspended license of Al Baraka Takaful Insurance Company and that of the Arab Jordanian Insurance Group Company for three months as from 12th of Dec. 2011. Accordingly, both companies shall be prohibited from issuing new insurance policies as from the date of license suspension. However, all rights and obligations resulting from policies issued prior to suspension will be deemed as valid, and both companies will be liable for them pursuant to paragraph (b) of article (49) of said law.
The Board approved resumption of Arab Jordanian Insurance Group Company to transact insurance business as from 3rd of Jan. 2012 as it embarked on implementing the first phase of a recovery plan. Both resolutions by the Board of Directors issued on 3rd .of April 2011 and 27th of Nov. 2011 will remain to be valid to the effect of forbidding the company to dispose any of its investments and fixed assets unless obtaining a prior approval from IC.
The Legal Framework Regulating Corrective Measures by IC- Article (41) of the Insurance Regulatory Act No. (33) of 1999 and its Amendments As a result of implementing the Supervisory and Regulatory Frameworks at the Commission in any of the following cases: 1. That the Company did not or may not fulfill its obligations or where the Company fails to continue its business. 2. That the Company committed a violation to the provisions of this Act, Regulation, Instructions or Decisions issued by virtue thereof. 3. That the necessary arrangements of the Company to reinsure risks are not enough, or that such arrangements are not taken. 4. That the Company has a gross violation of the business plan submitted to the Director General, according to which the License was granted. 5. That the Company is not transacting business for a period not less than one year, without justified or legitimate reason.
The following corrective measures are taken by IC Board of Directors: 1. Prohibit the Company from issuing more insurance contracts, or prevent it to transact business in a certain class of insurance or more. 2. Impose a maximum for the amount of premiums procured by the Company from Insurance Policies issued thereby. 3. Maintain in the Kingdom assets, the value of which equals all the net obligations of the Company arising from its transactions or a percentage of such value. 4. Restrict any of the investment activities of the Company related to the Solvency Margin or oblige the Company to liquidate its investments in any of these activities to serve this purpose.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 32 5. Request from the Company or the head office of the foreign insurance company, as the case maybe, to take the necessary measures to rectify the administrative situation of the Company, including the removal of the general manager, the Authorized Manager or any key employee therein. 6. Remove the chairman of the board of directors of the Company or any member of the board if it was proven that he is responsible for the violation. 7. Dissolve the board of directors of the Company and appoint a neutral temporary administrative committee of competence, and appoint a chairman and deputy for such committee. The functions and authorities of which shall be determined for a period not exceeding six months renewable for a term not exceeding one year, if necessity dictates. The Company shall bear the expenses of the committee as determined by the Board. Upon the completion of the assignment of the committee, a new board of directors shall be elected in accordance with the Companies Act. 8. Take the necessary procedures to merge the company with another Company, upon the approval of the company with which the merger is sought. 9. Suspend or cancel the License of the Company. 10. Rehabilitate the company. 11. Liquidate the company.
1.2.a Regulating and Supervising Insurance Supporting Service Providers
IC continued to receive and consider licensing and license renewal applications submitted by Insurance Supporting Service Providers. IC verified these applications to ensure fulfillment of requirements and conditions provided for in related legislatives. The following table illustrates progression of numbers of insurance supporting service providers:
Table (1-5): Number of Insurance Supporting Service Providers for the Years 2007- 2011
Growth Rate Item 2007 2008 2009 2010 2011 2011 compared to 2010
Insurance Agent 415 450 505 514 583 13% Insurance Broker 56 70 82 98 114 16% Reinsurance Broker 4 9 9 11 15 36% Loss Adjusters and Surveyors 37 42 46 50 56 12% Actuary 13 13 13 13 15 15% Coverholder - - - 1 1 0% Insurance Consultant 11 17 16 22 29 31% Companies Administrating Insurance 11 10 13 15 15 0% Business
Insurance Commission of Jordan / the Eleventh Annual Report_2011 33 Growth Rate Item 2007 2008 2009 2010 2011 2011 compared to 2010 Bancassurance* 11 11 11 9 10 10% Foreign Reinsurance Brokers** - - - 38 32 -16% TOTAL 558 622 695 771 870 13% * Banks used to do bancassurance business as insurance agents according to the instructions of licensing and regulating the business and responsibilities of an insurance agent No (1) of 2005 and amendments thereof. However special instructions were enacted for banks to do bancassurance business in compliance with the provisions of the Instructions of licensing, regulating and supervising the business of bancassurance No. (1) of 2008 and their amendments thereof.
** Numbers of reinsurance brokers residing outside the Kingdom approved by IC to do business in the Kingdom as from 2010.
IC conducts offsite and onsite visits of insurance supporting service providers to ensure their adherence to legislation issued by the IC, as well as their commitment to the professional code of conduct and ethics by means of the following:
Conducting onsite visits on all insurance supporting services providers and take necessary procedures in case of breaches. In 2011, onsite visits counted for (491) as per the table hereunder. Examining the financial data and other supervisory financial statements submitted to IC by such providers in order to verify compliance with relevant regulations. This step complements the role of onsite visits. Receiving complaints related to insurance supporting service providers and taking relevant procedures.
Table (1-6): Number of Onsite Visits to Insurance Supporting Service Providers (2010-2011)
Insurance Supporting Number of Onsite Visits in 2010 Number of Onsite Visits in 2011 Service Providers
484 visits to areas of vehicle 245 visits to areas of vehicle licensing Insurance Agents licensing 3 visits to insurance agents
outside the licensing areas Insurance Brokers 11 1 Loss Adjusters and 4 0 Surveyors Companies Administrating 5 3 Insurance Business TOTAL 265 491
Insurance Commission of Jordan / the Eleventh Annual Report_2011 34 1-3) Enhancing Insurance Sector Competence in Providing Services and enhancing its Competitiveness
IC pursued further its efforts to strengthen financial positions of insurance companies and ensure their capacity to fulfill their financial obligations and ensure their adherence to the code of conduct and ethics, and corporate governance rules at both insurance companies and insurance supporting service providers.
2. Capacity Building of Human Resources in the Insurance Sector
To realize its role in developing the insurance sector in Jordan, IC holds training and professional qualification programs, specialized in insurance to help support the Sector with qualified human resources. IC cooperated with international specialized institutes for this purpose: the Chartered Insurance Institute (CII) in London, Bahrain Institute for Banking and Financial Studies (BIBF), Life Office Management Association (LOMA) in the United States of America.
Graduates from the training programs since 2006 count for (303) graduates and the number of participants in professional certification programs counted for (77) persons in 2011.
Table (1-7): Number of Graduates and Certificates Awarded in (2006-2011) Certificate 2006 2007 2008 2009 2010 2011 Total Professional Diploma in Insurance (BIBF) 49 23 23 32 37 22 186 Advanced Professional Diploma in Insurance 31 11 15 13 70 (BIBF) Professional Certificate (PIC) 1 2 2 5 5 15 Diploma in Insurance (CII) 1 3 2 2 1 9 Advanced Professional Certificate (ACII) 1 2 3 Fellowship Certificate (Medical and Life) LOMA 2 1 1 3 7 LOMA Certificate (Arabic) 6 6 Other Certificates 6 1 7 TOTAL 81 35 45 56 53 33 303
Insurance Commission of Jordan / the Eleventh Annual Report_2011 35 3. Building Outstanding Partnerships with Local, Regional, and International Institutions
3-1) International and Regional Institutions
Insurance Commission (IC) sustained its efforts to coordinate and communicate with local financial sector regulators and regional and international insurance supervisors. IC maintains relations with the following international organizations engaged in the insurance sector in order to keep pace with developments worldwide. These organizations include:
. International Association of Insurance Supervisors (IAIS) . International Organization of Pension Supervisors (IOPS) . International Association of Insurance Fraud Agencies (IAIFA) . International Insurance Society (IIS) . Islamic Financial Services Board (IFSB) . Arab Forum of Insurance Regulatory Commissions (AFIRC)
In order to strengthen networking and cooperation between Arab and international insurance supervisors and to exchange experience with supervisors in other countries, IC received, in its headquarters, a delegation from the Omani Capital Market Authority, a delegation from Palestine Capital Market Authority, and a delegation from the Insurance Authority in Tunisia. These visits were aimed at reviewing the experience of IC in terms of regulating the insurance sector.
3-2) Partnerships with Local Institutions
IC cooperated with local public and private institutions to study and prepare the requirements necessary to develop several issues related to the insurance sector. IC worked with the committee commissioned to amend the civil liability resulting from medical (pharmacological) studies insurance instructions for 2010. It participated in the committee formed to study the Law of Medical Liability and the Medical Service Committee headed by the USAID- “Sabeq” Program. It also participated with other committees in amending the Maritime Commerce Act and amendments thereof No (12) of 1972 in addition to participation in committees formed to implement the road map towards improving ranking of Jordan in the international reports. IC participated, as well, in the expert taskforce/The committee to develop the service sector in Jordan chaired by the Ministry of Industry and Trade and the Jordan Enterprise Development Corporation.
On the other hand, IC organized workshops and lectures in order to build distinct partnerships with local institutions. A workshop was held on the provisions and applications of the insurance contract for judges in Jordan. Lectures were
Insurance Commission of Jordan / the Eleventh Annual Report_2011 36 delivered to introduce IC and its mandate to several agencies. Other lectures were delivered to several targeted groups on the topic of compulsory motor insurance.
3-3) Joint Committees to Follow up Issues Related to Insurance Companies and Companies Administrating Insurance Business Contracts with Medical Insurance Service Providers
Medical insurance ranks second after motor insurance in terms of total underwritten premiums reaching 24%1 of total premiums for 2011. Thus, IC formed committees to monitor issues related to contracts of insurance companies and companies administrating insurance business with medical service providers in order to improve such services. Following are those committees:
A Joint Committee on Contracts with the Jordan Medical Association A Joint Committee on Contracts with the Jordan Dental Association. A Joint Committee on Contracts with the Jordan Pharmaceutical Association
A Joint Committee on Contracts with the Jordanian Association of Medical Laboratory Science
A Joint Committee on Contracts with the Private Hospitals’ Association
Each committee is chaired by IC representative; the committees also have members who are representatives from the Corporation of Social Security, the Jordan Insurance Federation, the National Society for Consumer Protection, the Jordanian Association for Medical Insurance, and Companies Administrating insurance services business, in addition to the president of the related professional associations.
These committees discuss and follow up all developments related to contracts of insurance companies and companies administrating insurance business with the medical service providers including list of approved fees, rate of discount given, management charges, principles to revoke accreditation of a medical service provider, payment of claims, complaints received from any of the concerned parties, and undertake necessary procedures to settle such complaints.
In 2011, and in response to a request by the Jordanian Medical Association, the joint committee on contracts with the Jordanian Medical Association discussed the issue of discount imposed by the insurance companies on the fees of doctors, the managed fee discount requested by companies administrating insurance business and the new fee list, as announced in the local newspapers. In addition, they discussed the
Preliminary Data
Insurance Commission of Jordan / the Eleventh Annual Report_2011 37 the new fee list, as announced in the local newspapers. In addition, they discussed the extent of commitment to the medical fee list for 2008 by both doctors and insurance companies.
On the other hand, four meetings were held for the joint committee of contracts with the Pharmacists’ Association to follow up on issues related to the committee mandate especially in terms of commitment of insurance companies and companies administrating insurance business to the contractual principles and standards approved by the Committee. They agreed on the principles of revoking licensing of pharmacies on condition they be circulated to insurance companies and companies administrating insurance business for implementation purposes. Complaints received from pharmacies were also handled and relevant procedures were made to settle such complaints.
The joint committee of contracts with the Jordanian Association of Medical Laboratory Science discussed the issue of having the medical labs grant a special discount of 20% to contracts concluded with insurance companies and companies administrating insurance business. This builds on the memos of understanding concluded early 2010 between the insurance sector and representatives of medical services. Follow up continued with the Ministry of Health to finalize this topic which is of special importance and impacts on both the public interest and leverage of the medical insurance services in the Kingdom.
Three meetings were held for the joint committee of contracts with Private Hospitals’ Association to follow up issues related to the committee mandate especially in terms of compliance by these hospitals with the agreed terms of the discount rate of fees approved by the Ministry of Health and given to insurance companies and companies administrating insurance business. In addition, seven complaints submitted by some hospitals related to delayed payments to these hospitals were processed and relevant parties were addressed for an amicable dispute resolution.
4. Promoting Jordan as a Regional Insurance Center
In response to His Majesty the King’s vision, IC pursued its efforts to promote Jordan as a regional insurance center by means of attracting international insurance companies to deliver their services to the neighboring regional markets from Jordan. In addition to the media promotion of advantages of investment in the Kingdom, IC continued to develop and improve the level of performance of the insurance sector in Jordan; which helps increase its qualifications and turn it into an environment that is more favorable and appealing to foreign investments.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 38 Accordingly, IC organized the following workshops: . In order to raise awareness of the judiciary of the technical and legal aspects related to insurance, a workshop was held on the “Provisions and Applications of the Insurance Contract for Practitioners in the Jordanian Judiciary” during November 27-28, 2011.
. In order to explain additional requirements to document the general principles and procedures adopted by the Actuary when evaluating the technical provisions and giving opinion, a workshop was held on “Certificate of Actuary of Life Insurance”, and “the Accounting Provision of Life Insurance” on 26th of Dec.2011.
. A workshop on “Regulation and Supervision of Private Pension” on 1st of March 2011.
Second: Maintaining a Balanced Relationship between Parties and Expanding the Insurance Coverage to include all Society Segments
1. Protecting the Rights of Insurance Policyholders and Beneficiaries
Insurance Commission (IC) has always been keen on maintaining balance among the insurance parties by means of providing methods and mechanisms to process and resolve insurance disputes through the following:
1-1) Inquiry and Insurance Dispute Resolution Department
IC receives complaints from citizens and attempts an amicable resolution between the insured or beneficiaries from the insurance policy and the insurance companies. In 2011, IC received (810) complaints (97%) of which are related to motor insurance. Efforts exerted by the Commission resulted in settling (752) complaints.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 39 Figure (1-1): Numbers of Complaints and Settlements for 2007-2011
Numbers of Complaints and Settlements for years 2007 - 2011
877 845 900 832 827 789 777 817 770 810 752 800 700 558 600 536 500 400 300 200 100 0 2006 2007 2008 2009 2010 2011 Complaints Settlements
IC calculates the Motor Complaint Index which comprises the share of a company of total complaints prorated to its market share from total premiums. The following figure illustrates the complaint index of motor insurance for the best (5) companies during 2011.
Figure (1-2): Motor Complaint Index for 2011 – Companies with the Fewest Complaints
Motor Complaint Index in 2011*
100
080
060
0.30 0.34 040 0.25 0.18 Market Share) Complaint Index Complaint 020 0.09 (Complaint Share /
000
Al NisrAl General Arab Orient Jordan MiddleEast
Arabi Arabic Insurance Insurance Insurance
Companies withthe fewest
Insurance Commission of Jordan / the Eleventh Annual Report_2011 40
1-2) Insurance Disputes Resolution Committee
Insurance Dispute Resolution Committee considered complaints submitted by some of the insured and beneficiaries after exhausting all amicable methods to settle their disputes with the insurance companies. Decisions that the Committee makes are binding for the insurance company because the Committee is objective in its judgment and non-biased in settling these complaints. It does so in compliance with relevant regulations with an eye on attaining rights of the insurance contractual parties. The Committee settled (19) complaints in 2011 against (13) in 2010. However, the Committee received (22) complaints in 2011 out of which (92%) are related to motor insurance.
Figure (1-3): Progression of Complaint and Settlement Numbers by the Insurance Dispute Resolution Committee for 2007-2011
33 35 31
30 26
23 25 22 19 19 20
13 13 15 12
10
5
0 2007 2008 2009 2010 2011
Complaints Settlements
1-3) Motor Accidents Compensation Fund
In order to provide compensation for victims of motor accidents in cases lacking an insurance coverage, IC established the Motor Accidents Compensation Fund in accordance with regulations issued in 2004. The Committee managing this Fund settled (76) claims in 2011 against (45) in 2010. The Committee received (71)
Insurance Commission of Jordan / the Eleventh Annual Report_2011 41 claims in 2011, though. Chapter Fours herein provides further details on the tasks and deliverables of the Fund in 2011.
Figure (1-4): Progression of Numbers of Claims and Settlements submitted to the Motor Accidents Compensation Fund for 2007-2011
80 76 71 70 60
60 53
50 45 40 40 30 30 25 19
20 9 10
0 2007 2008 2009 2010 2011
Complaints Settlements
2. Enhancing Insurance Awareness
2-1) Insurance Awareness Campaign
In 2011, the Commission exerted more efforts to raise and enhance awareness of insurance products and legislation, and the services that IC delivers to the insurance sector or to the public in general. Thus, it published and issued press releases, participated in televised interviews with regard to major and significant insurance issues in order to respond to inquiries in this respect. Educational lectures were delivered at some national agencies in order to interact with those working in such agencies and make use from their comments and feedback.
2-2) News Bulletins
In mid 2011, IC issued a news bulletin including a variety of news to highlight its activities during the first half of the year including new insurance legislation, and workshops in addition to the results of insurance companies in the first half of the year. Early 2012, IC will publish a new issue to cover the activities of the second half of 2011.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 42
2-3) Monthly Statistical Bulletins
IC publishes data related to the insurance sector in Jordan through statistical bulletins of key indicators of performance of the insurance sector including gross premiums, gross claims paid, and the percentage of gross premiums to the Gross Domestic Product (GDP). These bulletins include the progression of numbers of insurance supporting services insurance service providers, number of complaints submitted to each of the Inquiry & Insurance Dispute Resolution department and the Insurance Dispute Resolution Committee and settled complaints, and numbers of claims submitted to the Motor Accidents Compensation Fund and the number of settled claims. These data are published in the local, regional and international papers engaged in the insurance business in addition to IC website.
2-4) Insurance Commission Website
The website is an important medium through which the Commission introduces its objectives, tasks, services, strategic and annual plans, in addition to publishing all insurance legislation including instructions, regulations, and decisions.
The website includes electronic forms to apply for Commission’s services such as licensing or renewal of licenses of insurance supporting service providers. Complaints and inquiries can be also submitted through this website to the attention of IC where the competent employee will respond to them.
Number of visits to IC website in 2011 counted for (97510) visits with a daily average of (267) visits.
3. Introducing National Insurance Programs and Motivating the Sector to Develop New Insurance Products with a Social Perspective
Extending Provision of social protection and motivating the Sector to develop new insurance products with social dimension to achieve further development of the insurance sector are on top of the list of priorities for IC. Accordingly, the following initiatives were launched in 2011:
. Providing medical insurance coverage for expats.
. Providing medical insurance coverage for visitors to the Kingdom.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 43 3-1) Micro Insurance Project
Micro Insurance is defined as the protection of low income groups against specific risks in exchange for paying regular insurance premiums that are prorated to the probabilities of these risks occurrence and cost.
IC conducted an exhaustive study on micro insurance; its international applications and potential implementation in Jordan in order to provide insurance protection to the less franchised and low income groups in the community. The Commission will discuss the project with relevant stakeholders from the insurance sector and other domains.
3-2) Professional Indemnity Insurance Project
The Commission conducted a study on professional indemnity insurance and its international practices related to several occupations and potential implementation in Jordan. Several meetings were held with relevant stakeholders in relation to providing adequate compensation to victims of medical and occupational malpractice.
The issue was discussed with the Chartered Accountants’ Association and the Association of Jordanian Construction Contractors in order to raise awareness of the importance of such insurance and discuss mechanisms of implementation.
Third: Developing Institutional Performance
1. Developing Human Resource Management
Believing that competent human resources are crucial to achieving IC’s strategic objectives and leveraging performance level, and in order to develop such resources and enhance their capacities while retaining quality employees, Insurance Commission (IC) worked in 2011 on improving and developing methodologies of human resource management based on the results of regular measurement. IC has been keen on realizing these developments on the ground and strengthening interaction among employees as well as improving the principles and procedures of work.
1-1) Equality of Opportunities
IC incorporates the principle of fairness and equal opportunities in its core values. It observes this value in recruitment, appointment and promotion to senior positions as well as in education, training, and delegation on official missions. When comparing IC with other economic sectors in the Kingdom, IC scores high when it
Insurance Commission of Jordan / the Eleventh Annual Report_2011 44 comes to the percentage of female employees. Noticeable, female percentage is equally distributed amongst all job categories.
Figure (1-5): Equal Opportunities: Percentage of Females Employees to Total Employees for 2009- 2011
Percentage of Female Employees for years 2009 - 2011
60% 56% 50% 50% 50% 45% 43% 43% 44% 40% 40% 40% 38% 40% 37%
30%
16% 20% 16%
10%
0% 0% 0% 0% Leadership Supervisory and Technical and Supporting Total Comparative Specialty Administrative Services Ratios - Other Economic Sectors Female 2009 Female 2010 Female 2011
1-2) Rewards and Incentives
Rewarding outstanding performance is another core value for IC which has been exerting the efforts to reward outstanding performance in line with its mandate. It aims at motivating employees to maintain such a performance and continue, with devotion, to improve their level of performance. IC seeks to boost their morale and strengthen their belongingness to the Commission whilst urging positive competition among them.
2. Developing and Strengthening Staff Capacity
In order to develop administrative and professional skills of its employees, IC’s employees participated in several training programs and workshops in the technical and financial domains. In addition, IC supports employees' participation in programs awarding professional certificates; which significantly helps leverage the level of their skills.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 45 Some of the second tier employees were enrolled in a specialized program to develop their leadership's skills as part of their career path and succession plan.
Table (1-8): Number of IC’s Employees Participating in the Professional Certificate Programs in 2011 Certificate 2011
Professional Diploma in Insurance (BIBF) 10
Professional Diploma in Insurance (CII) 3
Professional Certificate (PIC) 5 TOTAL 18
Table (1-9): Number of IC Employees Holding Professional Certificates and Diplomas
Advanced Certificate Certificate Diploma in Professional Advance FLMI Other in in Insurance Certificate Total (BIBF) BIBF Diploma DLHI Certificates* Insurance Insurance (CII) (PIC) (ACII)
Number of Employees holding the Certificate/ 1 - 1 12 32 - 4 8 13 71 completed the program Number of Participants in the Program at 1 4 - 2 1 - 2 1 11 Present * Including ICCIE, CFA- Level1, PMP, MCAD, MCSD, CORE, Certified Corporate Banker, PHR, HR, Diploma, Certified Manager, Diploma in Banking Credit, Diploma in Financial Analysis, and Diploma in Social Security.
3. Developing and Implementing Operation Management Methodologies
In order to develop and implement the operation management methodologies, IC reviews, simplifies, and identifies critical success factors for major operations. In addition, the Commission examines adherence of IC’s departments, offices and administrative units with such procedures, and follows up on implementation of corrective measures and suggestions related to improving and simplifying operations.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 46 3-1) Customer Satisfaction Study
The IC aims at providing distinguished services and continuous improvement in the quality of its services, and in order to achieve this, and communication with all service recipients, IC conducted a customer satisfaction survey. The study is aimed at identifying and furthering strengths and removing weaknesses and gaps. In general, customer satisfaction marked 85% in 2011 compared with 84% and 81% in 2010 and 2009 respectively.
Figure (1-6): Realized Customer Satisfaction for 2009-2011
Customer Satisfaction Rate Realized in 2009- 2011 Compared with Targeted Rate
84% 81% 81% 83% 85% 84% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2009 2010 2011 Realized Targeted
3-2) Renewal of ISO 9001 Certification
Based on the assessment conducted by SGS- the international corporation granting the ISO certificate in order to verify compliance with requirements of the Quality Certification (ISO: 9001), the ISO: 9001 was renewed till 23rd of Oct. 2014. The IC was awarded the (ISO: 9001) for the first time in 2005.
3-3) Risk Management
IC identified the major risks (institutional risks) that may hinder achievement of its objectives and the national objectives it supports. The Commission risk management strategy includes strategic risks, occupational risks, operational risks, human resources risks, electronic risks and material risks.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 47 In 2011, the Commission modified its risk management methodology to incorporate international practices. New concepts were introduced such as assets at risk, initial asset hierarchy appetite (tolerance) for risk, acceptable risk gap, categorization of impact levels and set fiscal values attributable to each of these likely impact level, categorization of probable risk occurrence, evaluate the relative strength of controls implemented to mitigate varied risks, and assessment of control environment.
The risk management plan was modified; risks were reviewed and assessed (affected asset, impact, probability); additional risks were introduced and controls implemented to mitigate each risk in the strategy were assessed, as well.
In order to tackle such risks, the research and strategic planning department follows up on implementing required controls with parties of relevance on a regular basis according to the priority of relevant risk. Reports are submitted to the senior management for review and undertaking proper procedures.
4. Increasing Competence of Strategic Planning at Insurance Commission
With the participation of all hierarchical levels, IC prepared a plan of action for 2011 taking into consideration the internal and external business environment as well as the impact of economic, legislative, and financial factors influencing the business environment of the Commission and its internal instructions and procedures.
In cooperation with the national financial and monetary sector institutions, IC reviewed the part related to the financial sector in the National Agenda, and monitored implementation of projects under the Jordan's Executive Development Program for the years 2011-2013, and IC’s performance indicators.
IC joined the expert taskforce 1 /Committee to Develop the Service Sector in Jordan chaired by the Ministry of Industry and Trade, and the Jordan Enterprise Development Corporation.
IC achieved (71.7%) of its business plan for 2011 which included (42) projects; and achieved (75%) of projects and targeted performance indicators for 2011 according to their significance in terms of achieving institutional objectives and Royal initiatives.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 48 5. Regulating and Developing Financial Management at Insurance Commission/ Leveraging Transparency and Accountability
The Internal Audit Unit at IC prepared the annual business plan in line with the risks regularly assessed by IC and in a manner to ensure that all audited departments are operating in compliance with IC instructions and regulations. Periodical reports are prepared on the results of internal audit and relevant recommendations to increase proficiency of the internal audit discipline were submitted to the Acting Director General for relevant action and follow up later on.
6. Keeping abreast with Technological Developments
All insurance companies in the Kingdom were interconnected with the Virtual Private Network (VPN) of IC so that they can have access to the regulatory information system of insurance business (In-Reg). Accounts were created for these companies in the new software which has been used to receive data of monthly forms since April 2011.
Modifications of the monthly forms have already been introduced to enable the Commission to do without print outs of the monthly forms. The project task force is currently introducing amendments of the supervisory forms to the electronic version developed in 2011.
7. Social Responsibility
In line with its plan of corporate social responsibility, IC organized a campaign for blood donation in its headquarters in favor of patients of Al-Hussein Center for Cancer. The campaign was aimed at enhancing the role of IC in its local community as highlighted in the support it provides to charities, voluntary organizations, and all types of humane assistance. Employees of IC participated voluntarily in said campaign to help rescue patients of cancer.
Under the winter campaign and in cooperation with the Green Crescent Society and the Jordan Sun Orthodox Association, IC gave donations to the account of needy families on Hitteen Camp and Jebal Al-Ashrafiya. Donations given by IC staff members and their families included clothes, blankets, toys, and school supplies.
Some of IC staff volunteered along the year with INJAZ to provide economic opportunities for the Jordanian Youth. Volunteers implemented the training courses of INJAZ in several schools. Those courses were aimed at refining skills of the
Insurance Commission of Jordan / the Eleventh Annual Report_2011 49 Jordanian youth to be ready to join the labor market as competent employees or entrepreneurs.
In the past years, IC joined the efforts and exercises aimed at recycling paper in cooperation with the Jordan Environment Society and furthered procedures to save on water and power consumption at IC premises.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 50
Chapter Two
Business Results of the Jordanian Insurance Sector
For the Fiscal Year 2011
2
Insurance Commission of Jordan / the Eleventh Annual Report_2011 51
21
First: Economic Indicators
Total written insurance premiums to the Gross Domestic Product (GDP) in current prices reached (2.13%) for 2011 compared with (2.18%) for 2010. The per capita share of insurance premiums for 2011 amounted to JD (69.9).
The GDP in current prices for 2011 reached JD (20476) million while GDP in constant prices showed a growth rate of (2.6%) for 2011 compared to a growth average of (2.3%) for 2010. The following figure illustrates total insurance premiums to GDP in current prices for years 2007-2011.
Figure (2-1-1): Insurance penetration: Total Written Insurance Premiums to GDP (in current prices) for 2007-2011
Total Written Premiums of Insurance Sector to GDP in Current Prices (2007 - 2011) 3.0% 2.5% 2.32% 2.14% 2.16% 2.18% 2.13% 2.0% Growth Rates 1.5% 1.0% 0.5% 0.0%
2007 2008 2009 2010 2011* * Preliminary Data
Table (2-1-1): Total Written Insurance Premiums to GDP (in current prices) and premiums (insurance density) for 2011 Total Insurance Insurance Per Capita Item Premiums Penetration Premiums (JD) (JD million) % Total Insurance Premiums 436.68 2.13% 69.87 Total Premiums of General Insurance 395.86 1.92% 63.34 Motor Insurance 183.82 0.9% 29.41 Marine and Transport Insurance 23.85 0.12% 3.81 Aviation Insurance 6.89 0.03% 1.10
Insurance Commission of Jordan / the Eleventh Annual Report_2011 52 Total Insurance Insurance Per Capita Item Premiums Penetration Premiums (JD) (JD million) % Fire and Other Damages to Property 57.37 0.28% 9.18 Insurance Liability Insurance 6.38 0.03% 1.02 Credit Insurance 0.46 0.00% 0.073 Other General Classes of Insurance 11.22 0.07% 1.79 Medical Insurance 105.88 0.52% 16.94 Total Life insurance premiums 40.8 0.19% 6.18 JD 1= USD 1.41
Table (2-1-2): Total Written Insurance Premiums to GDP for 2010 and 2011 (Penetration Ratio)
Total Written Premiums of insurance Contribution of Insurance Premiums for sector (Penetration Ratio) for 2011 2010 Country General Total General Life Total Life Written Written Insurance Assurance Premiums Assurance Insurance Premiums % % % % % % Bahrain 1.80 0.60 2.40 2.00 0.80 2.80 Morocco 2.00 0.90 2.90 1.90 0.90 2.80 Lebanon 2.10 0.80 2.90 2.10 0.70 2.80 Jordan** 1.93 0.20 2.13 1.98 0.20 2.18 United Arab Emirates 1.50 0.30 1.80 1.80 0.30 2.10 Tunisia 1.50 0.30 1.80 1.50 0.20 1.70 Oman 0.90 0.20 1.10 1.10 0.20 1.30
Kingdom of Saudi Arabia 0.80 0.10 0.90 1.00 0.10 1.10 Algeria 0.60 0.10 0.70 0.70 0.10 0.80 Egypt 0.40 0.30 0.70 0.40 0.30 0.70 Kuwait 0.40 0.10 0.50 0.40 0.10 0.50 Middle East and Central 1.10 0.38 1.48 1.14 0.37 1.51 Asia Average Africa Average 1.16 2.46 3.62 1.13 2.73 3.86 International Average 2.83 2.77 6.60 2.89 4.00 6.89 * Source: Swiss Re, http://www.swissre.com/sigma ** Source: Insurance Commission of Jordan.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 53 The contribution of the insurance sector in the traded volume on Amman Stock Exchange mounted to (2.6%) of total trading volume for 2011; the Free Float Weighted Index of insurance sector marked (2089.8) points at the end of 2011 compared with (2330) points at the end of 2010.
Figure (2-1-2): Monthly Prices indices of Insurance sector Compared with the Banking and Financial Sector (Free Float Weighted Index) for the years 2008- 2011
6000
5000
4000 Insurance 3000 Banking 2000
Free Float Price Index Index Price Float Free 1000 Financial Sector 0 May July May July May July May July April April April April June June June June March March March March August August August August October October October October January January January January January January January January February February February February November December November December November December November December September September September September 2008 2009 2010 2011
Insurance Commission of Jordan / the Eleventh Annual Report_2011 54 22
Second: Business Results of Jordanian Insurance Companies for 20111
Insurance sector consists of (28) insurance companies, whereof one is licensed as a life company, (11) are licensed as non-life companies, (16) are licensed as composite companies.
Gross written premiums inside Jordan reached JD (437) million in year 2011 at an incremental rate of (6.9%) in comparison with the year 2010, which is attributed to the increase in written premiums of most of insurance classes especially in medical insurance by (13%), motor insurance by (4%), aviation insurance by (104%), and marine insurance by (12%).
In addition, gross claims paid increased to JD (345) million for the year 2011 at an incremental rate of (22.4%) in comparison with the year 2010, whereas gross claims paid have increased by (19%) for motor insurance, (128%) for fire & other property’s damage insurance, (22%) for medical insurance, and claims paid decreased by (56%) for credit and surety ship insurance.
As of January 2011, Jordanian insurance companies started applying the early stage of the International Financial Reporting Standard No. (9) "Financial Instruments"; were they had to reclassify their investment according to the new standard. Total investments indicated a decrease of (4%) to reach JD (455.0) million in 2011 compared to 2010. Financial assets at fair value through profit or loss reached JD (44.2) million by the end of 2011, financial assets at fair value through comprehensive income reached JD (75.5) million, financial assets at amortized cost reached JD (61.8) million, while investments in subsidiaries & associates increased by (456%) to reach JD (746) thousand, and property investments increased by (14.9%) to reach JD (87.7) million, and there was a decrease in deposit in banks by (11.3%) to reach JD (178) million.
The insurance sector in Jordan suffered losses of JD (6.5) million before tax in 2011 compared with profits of JD (15.9) million for 2010, whereas the companies suffered a gross technical losses in 2011 by JD (2.0) million in comparison to technical profits of JD (14.9) million in 2010 inside Jordan, which is attributed to the increase of motor insurance losses of JD (20.5) in 2011 million compared to losses of JD (4.4) million in 2010, and a decrease of medical insurance profits from JD (3.8) million in 2010 to JD (1.6) million in 2011, while nearly all other insurance classes achieved positive technical results.
1 Preliminary data subjected to inconsiderable change.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 55 The increase of the compulsory motor insurance losses is attributed to the increase in cost of claims incurred by 20.6% to reach JD (118.3) million in 2011 compared to JD (98.1) million in 2010, while net earned premiums income increased by 13.6%, yielding a loss ratio1 of 105% for 2011 compared to 99% in 2010.
For the first time, supplementary motor insurance experienced losses of JD (517) thousand in 2011 compared to profits of JD (7.5) million for 2010, and accordingly the supplementary motor insurance loss ratio increased from 72% in 2010 to 90% in 2011. It is worth mentioning that the average cost per motor accident increased by 24% from JD (788) in 2010 to JD (975) in 2011.
The insurance sector’s earnings from financial assets and investments reached JD (3.5) million in comparison with JD (1.1) million for 2010, which is mainly attributed to the increase in shares fair value and dividend income, in addition to property rent and selling earnings. The interest income earned from bank deposits and financial assets at amortized cost during 2011 reached JD (10.4) million compared to JD (11.7) million during 2010, consequent to the decrease of deposit amounts in the banks.
The Insurance Commission during 2011 performed the necessary analysis about the performance of the insurance companies and the losses suffered, several procedures were implemented according to the nature and cause of the loss, and the special circumstances related to each company. Among those procedures: pursue applying underwriting limits for compulsory motor insurance based on the company owner's equity to insure the company's capability to meet its financial obligations, as well as to contribute in minimizing the risk accumulation in an individual insurance class for a group of companies, pursue conducting onsite inspections on the insurance companies, and impose fines on the breached companies to the Insurance Regulatory Act No. (33) of 1999 and the instruction issued pursuant thereto. Furthermore, the commission directed the insurance companies to improve their financial strength and encouraged mergers, to enhance proper managerial practices including applying corporate governance and proper technical underwriting and claim management, encouraged introduction of new insurance products corresponding to society needs and thus fostering the financial services in Jordan.
In order to maintain a balanced relation among insurance parties (insurers, insured and third party), the insurance commission made some amendments in the compulsory motor insurance; these amendments included reimplementation of the "excess amount", setting a limitation for insurance company liability of 10% for the vehicle loss of value, and setting specific limits for the loss of use for damaged vehicles. The financial effect of these amendments is expected to be reflected on 2013 financial results.
Its worth mentioning that starting form the beginning of the year 2013, the compulsory motor insurance will be liberalized by abolishing the current tariff rates
1 Loss ratio = net claims cost / net earned premiums.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 56 and allowing companies to underwrite according to technical basis. This decision made by the IC board of directors, and currently the IC is studying the optimal application for the decision mentioned.
Total technical provisions increased to reach JD (254.9) million in the year 2011 at an incremental rate of (7.4%) compared with the year 2010, this was attributed to the increase in most technical provisions especially the net outstanding claims provision by (13%) and net mathematical provision by (5%).
Paid-up capital reached JD (296.2) million in the year 2011, with an increase by (2%) in comparison with the year 2010, whereas the shareholder’s equity decreased by (10%) in comparison with the year 2010 to reach JD (316.7) million.
The Jordanian insurance sector loss ratio1 for the general insurance business was (94.3%), and Jordanian insurance sector operational profit ratio2 was (-0.5 %).
Jordanian insurance sector retention ratio was (59.0%) for the year 2011, this ratio decreased by (3%) compared with the previous year.
Return on assets and return on shareholder’s equity for the Jordanian insurance sector were (0. - 9%) and (-2.0%) respectively.
Results of Jordanian Insurance Companies for the year 2011 – Outside Branches
Gross written premiums outside Jordan decreased to JD (7.5) million for the year 2011 at a rate of (11.7%) in comparison with the year 2010. In addition gross claims paid by Jordanian companies' external branches decreased to JD (4) million, at a rate of (0.7%) in comparison with the year 2010.
External branches of insurance companies underwrite motor, marine, fire & other damages to property, liability, medical, life and other insurance business classes.
External branches achieved technical profits of JD (1.5) million in the year 2011 in comparison with JD (2.1) million in the year 2010. The highest technical profits were for the motor insurance and fire & other property’s damage classes of JD (1,077) thousand and JD (160) thousand respectively.
1 Loss ratio = net claims cost / net earned premiums. 2 Operating profit margin = net technical profit / gross written premiums.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 57 Table (2-2-1): Balance Sheet for the Jordanian Insurance Sector
as of 31/12/2011
*2011 **2010
Assets
Investments
Deposits at Banks 178,005,182 200,624,154
Financial Assets at Fair value Through Profit or loss 44,185,452 0
Financial Assets at Fair value Through Other Comprehensive Income 75,479,266 0
Financial Assets at Amortized Cost 61,785,014 0
Financial Assets for Trading 0 22,335,262
Available for Sale Financial Assets 0 101,647,099
Held to Maturity Investments 0 65,660,900
Investments in Subsidiaries & Associates 746,043 134,164
Property Investments 87,744,871 76,393,711
Loans 7,034,431 7,069,147
Other Investments 26,186 11,186
Total Investments 455,006,445 473,875,623
Cash on Hand & at Banks 19,973,735 19,885,964
Receivable Notes & Post-Dated Cheques 21,183,235 19,762,978
Accounts Receivable - Net 106,447,894 101,053,325
Due from Other Reinsurers 32,266,998 24,907,525
Deferred Tax Assets 9,628,891 6,156,619
Property & Equipment - Net 62,838,696 59,888,160
Intangible Assets 1,235,097 1,307,086
Other Assets 14,641,808 11,876,119
Total Assets 723,222,799 718,713,399
* 2011 data are primary and could be changed.
** There is some differences in the comparative years data and 2010 Insurance Commission annual report because the data in 2010 annual report was a primary data
Insurance Commission of Jordan / the Eleventh Annual Report_2011 58 2011 2010
Liabilities and Shareholders' Equity
Liabilities
Net Unearned Premium Provision 100,203,842 96,091,412
Net Outstanding Claims Provision 87,941,890 77,868,659
Net Mathematical Provision 65,638,166 62,668,147
Other Technical Provisions 1,091,471 650,000
Total Technical Provisions 254,875,369 237,278,218
Bank Loans 8,294,936 5,532,072
Accounts Payable 38,525,512 26,994,702
Accrued Expenses 819,654 847,687
Due to Other Reinsurers 52,194,696 46,311,991
Provisions 3,857,766 4,078,797
Income Tax Provision 5,169,530 6,751,667
Loans 15,480,304 13,385,480
Deferred Tax Liability 752,272 1,627,768
Other Liabilities 26,543,960 22,324,016
Total Liabilities 406,513,999 365,132,398
Shareholders' Equity
Authorized capital 305,000,680 300,400,680
Paid up Capital 296,150,680 295,650,680
Treasury Stocks 1,238,133 1,238,133
Net Premiums on Paid up Capital 4,080,978 4,080,978
Statutory Reserve 35,192,652 33,948,967
Voluntary Reserve 5,244,636 5,282,263
Other Reserves 109,983 109,983
Accumulated Change in Fair Value -3,853,298 6,989,912
Retained Earnings (Accumulated Losses) -27,980,171 -10,580,619
Others 7,295,605 17,966,736
Total Shareholders' Equity 315,002,932 352,210,767
Minority Interest 1,705,868 1,370,234
Total Shareholders' Equity 316,708,800 353,581,001
Total Liabilities & Shareholders' Equity 723,222,799 718,713,399
Insurance Commission of Jordan / the Eleventh Annual Report_2011 59 Table (2-2-2): Income Statement for Jordanian Insurance
Sector for the Period Ended 31/12/2011
Statement 2011 2010 Revenues Total Written Premiums 444,076,610 417,102,114 Deduct: Reinsurance Share 174,077,320 152,678,857 Net Written Premiums 269,999,290 264,423,257 Net change In Unearned Premium Provision 4,644,048- 10,867,428- Net change in Mathematical Provision 2,970,020- 2,708,434- Net Earned Premium Income 262,385,222 250,847,395 Commissions Received 23,227,647 20,893,214 Issuing Fees 16,405,945 15,354,096 Interests Revenues 10,427,833 11,746,364 Gain (losses) from Financial Assets & Investments 3,477,591 1,123,876 Other Revenues 9,430,803 8,649,144 Total Revenues 325,355,041 308,614,089 Cost of Claims Claims Paid 343,518,366 280,405,739 Maturity & Surrender of Policies 5,757,008 5,759,144 Deduct: Recoveries 33,747,229 27,683,825 Deduct: Reinsurance Share 95,497,474 65,812,653 Net Claims Paid 220,030,671 192,668,405 Net change in Outstanding Claims Provision 9,301,662 7,161,497 Allocated Administrative Expenses 47,907,931 45,102,180 Excess of loss 5,458,039 4,824,942 Acquisition policies fees 18,808,286 18,459,383 Other expenses 4,898,567 5,241,363 Underwriting Profit ( Loss ) 306,405,156 273,457,770 Employees Expenses 9,606,020 9,012,402 Depreciation 3,282,597 2,737,469 Administrative Expenses 4,762,949 4,508,076 Doubtful Debts Expense 3,991,024 2,937,634 Doubtful debt Expences (amortized cost) 419,580 0 Doubtful debt Expenses (available for sale) 0 181,127 Other provisions 0 119,754 Impairment of Property & Equipment 318,728 95,661 Other Expenses 3,420,505 3,360,662 Total Expenses 25,801,403 22,952,785 Share of Profit of Subsidiaries & Associates 378,969 3,708,222 Net Profit (Loss) Before Tax -6,472,549 15,911,756 Tax 1,253,391 4,523,985 Profit after Tax -7,725,940 11,387,771
Insurance Commission of Jordan / the Eleventh Annual Report_2011 60 Table (2-2-3): Underwriting Profit (Loss) Account / Total Non- Life (Inside Branches)
For Jordanian Insurance Sector for the Year Ended 31/12/2011
Statement 2011 2010
Written Premiums
Direct Insurance 360,569,519 334,767,528
Reinsurance Accepted 35,310,770 35,822,820
Total Written Premiums 395,880,289 370,590,348
Deduct:
Local Reinsurance Share 30,316,865 28,086,250
Foreign reinsurance share 132,527,449 113,381,635
Net Written Premiums 233,035,975 229,122,463
Add :
Unearned Premium Provision 1/1 142,677,122 127,845,920
Deduct : Reinsurance Share 49,780,256 46,236,974
Net Unearned Premium Provision 1/1 92,896,866 81,608,946
Deduct :
Unearned Premium Provision 31/12 153,718,928 142,367,726
Deduct : Reinsurance Share 56,653,082 49,694,767
Net Unearned Premium Provision 97,065,846 92,672,959
Changes in Premium Deficiency reserve 841,471 0
Net Earned Premium Income 228,025,524 218,058,450
Cost of Claims
Claims Paid 323,837,914 261,732,865
Deduct :
Recoveries 32,833,803 26,774,967
Local Reinsurance Share 30,464,511 7,079,794
Foreign Reinsurance Share 54,176,023 49,166,478
Net Claims Paid 206,363,577 178,711,626
Add :
Outstanding Claims Provision 31/12 190,706,222 174,724,141
Deduct : Reinsurance Share 96,647,386 93,091,991
Deduct : Recoveries 11,923,984 8,948,200
Net Outstanding Claims Provision 31/12 82,134,852 72,683,950
Deduct :
Outstanding Claims Provision 1/1 176,133,935 153,901,423
Deduct : Reinsurer Share 94,799,611 83,109,969
Deduct : Recoveries 7,878,806 5,529,537
Net Outstanding Claims Provision 73,455,518 65,261,917
Cost of Claims Incurred 215,042,911 186,133,659
Underwriting Profit (Loss)
Add :
Commissions Received 22,234,186 19,852,493
Issuing Fees 15,854,102 14,483,190
Investment Income Attributable to U/W 321,325 299,058
Other Revenues 1,926,735 1,862,933
Total Revenues 40,336,348 36,497,674
Deduct :
Commissions Paid 14,694,655 14,536,446
Allocated Administrative Expenses 41,499,567 39,250,851
Other expenses 4,238,700 4,598,354
Total Expenses 60,432,922 58,385,651
Underwriting Profit ( Loss ) 7,113,961- 10,036,814
Insurance Commission of Jordan / the Eleventh Annual Report_2011 61 Table (2-2-4): Underwriting Profit (Loss) Account - Motor
for Jordanian Insurance Sector for the Year Ended 31/12/2011
Statement 2011 2010
Written Premiums
Direct Insurance 164,754,423 158,922,700
Reinsurance Accepted 19,070,105 17,792,033
Total Written Premiums 183,824,528 176,714,733
Deduct:
Local Reinsurance Share 12,610,959 12,396,682
Foreign reinsurance share 3,791,688 3,393,971
Net Written Premiums 167,421,881 160,924,080
Add :
Unearned Premium Provision 1/1 73,557,057 63,860,811
Deduct : Reinsurance Share 3,383,311 3,467,511
Net Unearned Premium Provision 1/1 70,173,746 60,393,300
Deduct :
Unearned Premium Provision 31/12 77,635,966 73,320,277
Deduct : Reinsurance Share 3,322,545 3,297,822
Net Unearned Premium Provision 74,313,421 70,022,455
Changes in Premium Deficiency reserve 606,568
Net Earned Premium Income 162,675,638 151,294,925
Cost of Claims
Claims Paid 190,780,084 160,331,461
Deduct :
Recoveries 27,627,111 23,401,357
Local Reinsurance Share 4,426,198 4,506,334
Foreign Reinsurance Share 4,340,076 4,428,997
Net Claims Paid 154,386,699 127,994,773
Add :
Outstanding Claims Provision 31/12 100,162,318 82,996,573
Deduct : Reinsurance Share 21,726,574 17,411,789
Deduct : Recoveries 10,410,487 7,166,268
Net Outstanding Claims Provision 31/12 68,025,257 58,418,516
Deduct :
Outstanding Claims Provision 1/1 84,385,078 75,462,233
Deduct : Reinsurer Share 19,109,515 19,099,456
Deduct : Recoveries 6,096,874 5,431,792
Net Outstanding Claims Provision 59,178,689 50,930,985
Cost of Claims Incurred 163,233,267 135,482,304
Underwriting Profit (Loss)
Add :
Commissions Received 277,107 454,278
Issuing Fees 9,495,442 8,731,036
Investment Income Attributable to U/W 269,270 229,977
Other Revenues 790,255 815,763
Total Revenues 10,832,074 10,231,054
Deduct :
Commissions Paid 8,761,981 8,679,067
Allocated Administrative Expenses 20,318,108 19,852,050
Other expenses 1,706,962 1,934,415
Total Expenses 30,787,051 30,465,532
Underwriting Profit ( Loss ) -20,512,606 -4,421,857
Insurance Commission of Jordan / the Eleventh Annual Report_2011 62 Table (2-2-5): Underwriting Profit (Loss) Account - Motor Third Party for Jordanian Insurance Sector for the Year Ended31/12/2011
Statement 2011 2010
Written Premiums
Direct Insurance 115,625,989 108,310,382
Reinsurance Accepted 11,583,346 13,953,883
Total Written Premiums 127,209,335 122,264,266
Deduct:
Local Reinsurance Share 9,212,252 10,235,999
Foreign reinsurance share 2,430,675 2,106,145
Net Written Premiums 115,566,408 109,922,122
Add :
Unearned Premium Provision 1/1 49,617,675 38,110,843
Deduct : Reinsurance Share 2,239,084 1,453,242
Net Unearned Premium Provision 1/1 47,378,591 36,657,601
Deduct :
Unearned Premium Provision 31/12 52,337,292 49,246,045
Deduct : Reinsurance Share 2,274,909 2,075,455
Net Unearned Premium Provision 50,062,383 47,170,591
Changes in Premium Deficiency reserve 0
Net Earned Premium Income 112,882,616 99,409,132
Cost of Claims
Claims Paid 125,072,753 103,572,450
Deduct :
Recoveries 8,133,262 5,298,949
Local Reinsurance Share 2,879,712 2,913,904
Foreign Reinsurance Share 3,267,324 3,185,600
Net Claims Paid 110,792,455 92,173,997
Add :
Outstanding Claims Provision 31/12 73,908,752 62,680,254
Deduct : Reinsurance Share 16,240,476 12,841,944
Deduct : Recoveries 3,910,221 3,932,633
Net Outstanding Claims Provision 31/12 53,758,055 45,905,676
Deduct :
Outstanding Claims Provision 1/1 62,753,502 57,286,117
Deduct : Reinsurer Share 14,450,318 14,246,269
Deduct : Recoveries 2,065,875 3,050,520
Net Outstanding Claims Provision 46,237,309 39,989,328
Cost of Claims Incurred 118,313,201 98,090,346
Underwriting Profit (Loss)
Add :
Commissions Received 77,669 154,735
Issuing Fees 4,309,282 4,769,449
Investment Income Attributable to U/W 14,430 13,332
Other Revenues 784,903 672,239
Total Revenues 5,186,284 5,609,755
Deduct :
Commissions Paid 4,226,853 4,620,533
Allocated Administrative Expenses 14,396,850 13,136,472
Changes in other reserves 38,095 56,539
Other expenses 1,089,301 1,149,003
Total Expenses 19,751,099 18,962,548
Underwriting Profit ( Loss ) -19,995,399 -12,034,006
Insurance Commission of Jordan / the Eleventh Annual Report_2011 63 Table (2-2-6): Underwriting Profit (Loss) Account - Marine
for Jordanian Insurance Sector for the Year Ended 31/12/2011
Statement 2011 2010
Written Premiums
Direct Insurance 21,674,910 19,723,773
Reinsurance Accepted 2,175,972 1,507,095
Total Written Premiums 23,850,882 21,230,868
Deduct:
Local Reinsurance Share 1,459,928 1,070,048
Foreign reinsurance share 18,860,275 16,790,630
Net Written Premiums 3,530,679 3,370,190
Add :
Unearned Premium Provision 1/1 4,698,322 4,343,753
Deduct : Reinsurance Share 3,391,072 3,223,192
Net Unearned Premium Provision 1/1 1,307,250 1,120,561
Deduct :
Unearned Premium Provision 31/12 5,104,831 4,698,322
Deduct : Reinsurance Share 3,766,764 3,391,072
Net Unearned Premium Provision 1,338,067 1,307,250
Changes in Premium Deficiency reserve 0
Net Earned Premium Income 3,499,862 3,183,501
Cost of Claims
Claims Paid 4,965,747 4,684,069
Deduct :
Recoveries 160,349 230,675
Local Reinsurance Share 44,805 35,458
Foreign Reinsurance Share 3,900,842 3,668,793
Net Claims Paid 859,751 749,143
Add :
Outstanding Claims Provision 31/12 18,572,769 14,314,527
Deduct : Reinsurance Share 16,903,522 12,529,976
Deduct : Recoveries 197,296 153,267
Net Outstanding Claims Provision 31/12 1,471,951 1,631,284
Deduct :
Outstanding Claims Provision 1/1 14,314,526 11,407,196
Deduct : Reinsurer Share 12,494,483 9,820,775
Deduct : Recoveries 153,267 107,268
Net Outstanding Claims Provision 1,666,776 1,479,153
Cost of Claims Incurred 664,926 901,274
Underwriting Profit (Loss)
Add :
Commissions Received 4,997,740 4,550,068
Issuing Fees 436,203 411,337
Investment Income Attributable to U/W 26,437 38,346
Other Revenues 446,796 433,648
Total Revenues 5,907,176 5,433,399
Deduct :
Commissions Paid 842,978 813,297
Allocated Administrative Expenses 2,782,212 2,694,174
Other expenses 211,937 242,438
Total Expenses 3,837,127 3,749,909
Underwriting Profit ( Loss ) 4,904,985 3,965,717
Insurance Commission of Jordan / the Eleventh Annual Report_2011 64 Table (2-2-7): Underwriting Profit (Loss) Account - Aviation for Jordanian Insurance Sector for the Year Ended 31/12/2011
Statement 2011 2010
Written Premiums
Direct Insurance 6,859,748 2,741,170
Reinsurance Accepted 27,399 641,923
Total Written Premiums 6,887,147 3,383,093
Deduct:
Local Reinsurance Share 208,433 0
Foreign reinsurance share 6,685,401 3,376,497
Net Written Premiums -6,687 6,596
Add :
Unearned Premium Provision 1/1 1,657,845 1,285,306
Deduct : Reinsurance Share 1,656,721 1,206,880
Net Unearned Premium Provision 1/1 1,124 78,426
Deduct :
Unearned Premium Provision 31/12 1,386,665 1,657,845
Deduct : Reinsurance Share 1,386,665 1,656,721
Net Unearned Premium Provision 0 1,124
Changes in Premium Deficiency reserve 0
Net Earned Premium Income -5,563 83,898
Cost of Claims
Claims Paid 37,342 0
Deduct :
Foreign Reinsurance Share 37,342 0
Net Claims Paid 00
Add :
Outstanding Claims Provision 31/12 63,350 10,700
Deduct : Reinsurance Share 57,000 7,000
Net Outstanding Claims Provision 31/12 6,350 3,700
Deduct :
Outstanding Claims Provision 1/1 10,700 84,700
Deduct : Reinsurer Share 7,000 73,600
Net Outstanding Claims Provision 3,700 11,100
Cost of Claims Incurred 2,650 -7,400
Underwriting Profit (Loss)
Add :
Commissions Received 133,954 278,175
Issuing Fees 67,028 13,703
Investment Income Attributable to U/W 1,855 446
Total Revenues 202,837 292,324
Deduct :
Commissions Paid 830 1,138
Allocated Administrative Expenses 578,840 308,527
Other expenses 18,905 13,419
Total Expenses 598,575 323,084
Underwriting Profit ( Loss ) -403,951 60,538
Insurance Commission of Jordan / the Eleventh Annual Report_2011 65 Table (2-2-8): Underwriting Profit (Loss) Account - Fire & Other Damage to Property for Jordanian Insurance Sector for the Year Ended 31/12/2011
Statement 2011 2010
Written Premiums
Direct Insurance 46,209,053 44,098,224
Reinsurance Accepted 11,160,004 12,194,929
Total Written Premiums 57,369,057 56,293,153
Deduct:
Local Reinsurance Share 11,489,787 11,732,748
Foreign reinsurance share 42,858,018 41,845,714
Net Written Premiums 3,021,252 2,714,691
Add :
Unearned Premium Provision 1/1 22,525,121 22,818,121
Deduct : Reinsurance Share 21,241,281 21,628,895
Net Unearned Premium Provision 1/1 1,283,840 1,189,226
Deduct :
Unearned Premium Provision 31/12 24,142,025 22,516,192
Deduct : Reinsurance Share 22,851,652 21,235,451
Net Unearned Premium Provision 1,290,373 1,280,741
Net Earned Premium Income 3,014,719 2,623,176
Cost of Claims
Claims Paid 25,569,015 11,232,149
Deduct :
Recoveries 341,628 243,712
Local Reinsurance Share 5,757,255 1,671,398
Foreign Reinsurance Share 18,192,359 8,301,169
Net Claims Paid 1,277,773 1,015,870
Add :
Outstanding Claims Provision 31/12 48,924,651 55,886,379
Deduct : Reinsurance Share 45,882,951 52,451,333
Deduct : Recoveries 173 0
Net Outstanding Claims Provision 31/12 3,041,527 3,435,046
Deduct :
Outstanding Claims Provision 1/1 55,896,783 48,612,835
Deduct : Reinsurer Share 52,493,159 45,559,197
Net Outstanding Claims Provision 3,403,624 3,053,638
Cost of Claims Incurred 915,676 1,397,278
Underwriting Profit (Loss)
Add :
Commissions Received 8,057,389 7,703,114
Issuing Fees 1,270,947 1,156,599
Investment Income Attributable to U/W 17,542 2,670
Other Revenues 285,471 262,671
Total Revenues 9,631,349 9,125,054
Deduct :
Commissions Paid 1,542,227 1,549,070
Allocated Administrative Expenses 5,622,174 5,406,774
Other expenses 597,684 544,240
Total Expenses 7,762,085 7,500,084
Underwriting Profit ( Loss ) 3,968,307 2,850,868
Insurance Commission of Jordan / the Eleventh Annual Report_2011 66 Table (2-2-9) : Underwriting Profit (Loss) Account - Liability for Jordanian Insurance Sector for the Year Ended 31/12/2011
Statement 2011 2010
Written Premiums
Direct Insurance 5,487,581 5,380,843
Reinsurance Accepted 895,832 917,552
Total Written Premiums 6,383,413 6,298,395
Deduct:
Local Reinsurance Share 842,093 769,390
Foreign reinsurance share 4,325,427 4,429,704
Net Written Premiums 1,215,893 1,099,301
Add :
Unearned Premium Provision 1/1 2,319,050 2,671,755
Deduct : Reinsurance Share 1,914,101 2,345,140
Net Unearned Premium Provision 1/1 404,949 326,615
Deduct :
Unearned Premium Provision 31/12 2,368,450 2,269,196
Deduct : Reinsurance Share 1,950,958 1,879,636
Net Unearned Premium Provision 417,492 389,560
Net Earned Premium Income 1,203,350 1,036,356
Cost of Claims
Claims Paid 497,746 414,087
Deduct :
Recoveries 25,457 14,991
Local Reinsurance Share 12,785 39,278
Foreign Reinsurance Share 174,492 154,117
Net Claims Paid 285,012 205,701
Add :
Outstanding Claims Provision 31/12 3,721,623 3,769,454
Deduct : Reinsurance Share 2,375,153 2,492,820
Deduct : Recoveries 6,450 0
Net Outstanding Claims Provision 31/12 1,340,020 1,276,634
Deduct :
Outstanding Claims Provision 1/1 3,769,454 3,431,208
Deduct : Reinsurer Share 2,465,528 2,215,997
Net Outstanding Claims Provision 1,303,926 1,215,211
Cost of Claims Incurred 321,106 267,124
Underwriting Profit (Loss)
Add :
Commissions Received 619,852 655,594
Issuing Fees 136,444 107,284
Investment Income Attributable to U/W 202 347
Other Revenues 6,726 1,046
Total Revenues 763,224 764,271
Deduct :
Commissions Paid 109,500 88,285
Allocated Administrative Expenses 662,224 658,961
Other expenses 49,998 64,113
Total Expenses 821,722 811,359
Underwriting Profit ( Loss ) 823,746 722,144
Insurance Commission of Jordan / the Eleventh Annual Report_2011 67 Table (2-2-10):Underwriting Profit (Loss) Account - Credit & Suretyship for Jordanian Insurance Sector for the Year Ended 31/12/2011
Statement 2011 2010
Written Premiums
Direct Insurance 455,009 464,035
Total Written Premiums 455,009 464,035
Deduct:
Foreign reinsurance share 115,839 116,732
Net Written Premiums 339,170 347,303
Add :
Unearned Premium Provision 1/1 597,349 1,021,439
Deduct : Reinsurance Share 184,179 165,392
Net Unearned Premium Provision 1/1 413,170 856,047
Deduct :
Unearned Premium Provision 31/12 542,515 597,348
Deduct : Reinsurance Share 225,396 184,179
Net Unearned Premium Provision 317,119 413,169
Net Earned Premium Income 435,221 790,181
Cost of Claims
Claims Paid 911,112 2,093,502
Deduct :
Recoveries 830,749 449,632
Foreign Reinsurance Share 133,745 592,576
Net Claims Paid -53,382 1,051,294
Add :
Outstanding Claims Provision 31/12 1,460,734 1,813,188
Deduct : Reinsurance Share 416,265 219,088
Deduct : Recoveries 1,300,786 1,623,047
Net Outstanding Claims Provision 31/12 -256,317 -28,947
Deduct :
Outstanding Claims Provision 1/1 1,813,188 1,119,792
Deduct : Reinsurer Share 219,088 63,197
Deduct : Recoveries 1,623,047 -13,959
Net Outstanding Claims Provision -28,947 1,070,554
Cost of Claims Incurred -280,752 -48,207
Underwriting Profit (Loss)
Add :
Commissions Received 19,292 13,780
Issuing Fees 11,257 26,148
Other Revenues 0 16,545
Total Revenues 30,549 56,473
Deduct :
Commissions Paid 0 126
Allocated Administrative Expenses 79,041 98,064
Other expenses 13,989 29,563
Total Expenses 93,030 127,753
Underwriting Profit ( Loss ) 653,492 767,108
Insurance Commission of Jordan / the Eleventh Annual Report_2011 68 Table (2-2-11): Underwriting Profit (Loss) Account - Medical for Jordanian Insurance Sector for the Year Ended 31/12/2011
Statement 2011 2010
Written Premiums
Direct Insurance 104,867,541 93,397,453
Reinsurance Accepted 1,021,275 629,461
Total Written Premiums 105,888,816 94,026,914
Deduct:
Local Reinsurance Share 2,592,487 624,881
Foreign reinsurance share 49,840,896 36,954,421
Net Written Premiums 53,455,433 56,447,612
Add :
Unearned Premium Provision 1/1 31,065,823 25,830,925
Deduct : Reinsurance Share 14,243,542 10,785,828
Net Unearned Premium Provision 1/1 16,822,281 15,045,097
Deduct :
Unearned Premium Provision 31/12 36,634,537 31,065,824
Deduct : Reinsurance Share 19,813,047 14,243,542
Net Unearned Premium Provision 16,821,490 16,822,282
Changes in Premium Deficiency reserve 234,903
Net Earned Premium Income 53,221,321 54,670,427
Cost of Claims
Claims Paid 98,361,039 80,731,098
Deduct :
Recoveries 3,842,598 2,426,309
Local Reinsurance Share 20,145,854 576,029
Foreign Reinsurance Share 26,347,860 31,116,677
Net Claims Paid 48,024,727 46,612,083
Add :
Outstanding Claims Provision 31/12 13,891,903 11,794,626
Deduct : Reinsurance Share 6,440,847 5,007,190
Deduct : Recoveries 8,792 5,618
Net Outstanding Claims Provision 31/12 7,442,264 6,781,818
Deduct :
Outstanding Claims Provision 1/1 11,794,626 9,757,561
Deduct : Reinsurer Share 5,007,189 3,490,175
Deduct : Recoveries 5,618 4,436
Net Outstanding Claims Provision 6,781,819 6,262,950
Cost of Claims Incurred 48,685,172 47,130,951
Underwriting Profit (Loss)
Add :
Commissions Received 6,617,239 4,910,529
Issuing Fees 4,080,972 3,654,635
Investment Income Attributable to U/W 5,373 26,993
Other Revenues 367,273 324,277
Total Revenues 11,070,857 8,916,434
Deduct :
Commissions Paid 2,328,504 2,154,478
Allocated Administrative Expenses 10,287,163 8,985,727
Other expenses 1,438,537 1,558,822
Total Expenses 14,054,204 12,699,027
Underwriting Profit ( Loss ) 1,552,802 3,756,883
Insurance Commission of Jordan / the Eleventh Annual Report_2011 69 Table (2-2-12):Underwriting Profit (Loss) Account - Other General Classes for Jordanian Insurance Sector for the Year Ended 31/12/2011
Statement 2011 2010
Written Premiums
Direct Insurance 10,261,254 10,039,330
Reinsurance Accepted 960,183 2,139,827
Total Written Premiums 11,221,437 12,179,157
Deduct:
Local Reinsurance Share 1,113,178 1,492,501
Foreign reinsurance share 6,049,905 6,473,966
Net Written Premiums 4,058,354 4,212,690
Add :
Unearned Premium Provision 1/1 6,256,555 6,013,810
Deduct : Reinsurance Share 3,766,049 3,414,136
Net Unearned Premium Provision 1/1 2,490,506 2,599,674
Deduct :
Unearned Premium Provision 31/12 5,903,939 6,315,336
Deduct : Reinsurance Share 3,336,055 3,806,344
Net Unearned Premium Provision 2,567,884 2,508,992
Changes in Premium Deficiency reserve
Net Earned Premium Income 3,980,976 4,303,372
Cost of Claims
Claims Paid 2,715,829 2,246,499
Deduct :
Recoveries 5,911 8,291
Local Reinsurance Share 77,614 251,297
Foreign Reinsurance Share 1,049,307 904,149
Net Claims Paid 1,582,997 1,082,762
Add :
Outstanding Claims Provision 31/12 3,908,874 4,149,401
Deduct : Reinsurance Share 2,845,074 2,972,795
Net Outstanding Claims Provision 31/12 1,063,800 1,176,606
Deduct :
Outstanding Claims Provision 1/1 4,149,580 4,025,898
Deduct : Reinsurer Share 3,003,649 2,787,572
Net Outstanding Claims Provision 1,145,931 1,238,326
Cost of Claims Incurred 1,500,866 1,021,042
Underwriting Profit (Loss)
Add :
Commissions Received 1,511,613 1,286,955
Issuing Fees 355,809 382,448
Investment Income Attributable to U/W 646 279
Other Revenues 30,214 8,983
Total Revenues 1,898,282 1,678,665
Deduct :
Commissions Paid 1,108,635 1,250,985
Allocated Administrative Expenses 1,169,805 1,246,574
Other expenses 200,688 211,344
Total Expenses 2,479,128 2,708,903
Underwriting Profit ( Loss ) 1,899,264 2,252,092
Insurance Commission of Jordan / the Eleventh Annual Report_2011 70 Table (2-2-13): Underwriting Profit (Loss) Account / Total Life (Inside Branches)
for Jordanian Insurance Sector for the Year Ended31/12/2011
Statement 2011 2010
Written Premiums
Direct Insurance 38,435,289 35,661,289
Reinsurance Accepted 2,364,215 2,376,823
Total Written Premiums 40,799,504 38,038,112
Deduct:
Local Reinsurance Share 2,815,580 1,962,591
Foreign reinsurance share 12,241,010 11,947,278
Net Written Premiums 25,742,914 24,128,243
Add :
Unearned Premium Provision 1/1 592,821 689,395
Deduct : Reinsurance Share 361,058 407,498
Net Unearned Premium Provision 1/1 231,763 281,897
Mathematical Provision 1/1 65,429,235 62,160,237
Deduct : Reinsurance Share 3,186,234 2,613,421
Net Mathematical Provision 1/1 62,243,001 59,546,816
Deduct :
Unearned Premium Provision 31/12 590,903 592,821
Deduct : Reinsurance Share 345,882 361,059
Net Unearned Premium Provision 245,021 231,762
Mathematical Provision 31/12 68,152,173 65,429,236
Deduct : Reinsurance Share 2,990,935 3,186,234
Net Mathematical Provision 31/12 65,161,238 62,243,002
Changes in Premium Deficiency reserve
Net Earned Premium Income 22,811,419 21,482,192
Cost of Claims
Claims Paid 15,687,715 14,623,746
Maturity & Surrender of Policies 5,716,871 5,747,424
Deduct :
Recoveries 3,662 23,184
Local Reinsurance Share 685,437 329,672
Foreign Reinsurance Share 9,930,147 9,133,834
Net Claims Paid 10,785,340 10,884,480
Add :
Outstanding Claims Provision 31/12 8,818,164 6,492,081
Deduct : Reinsurance Share 5,363,069 3,567,248
Net Outstanding Claims Provision 31/12 3,455,095 2,924,833
Deduct :
Outstanding Claims Provision 1/1 6,492,081 6,329,195
Deduct : Reinsurer Share 3,567,248 3,334,886
Net Outstanding Claims Provision 2,924,833 2,994,309
Cost of Claims Incurred 11,315,602 10,815,004
Underwriting Profit (Loss)
Add :
Commissions Received 576,230 592,858
Issuing Fees 303,272 289,954
Investment Income Attributable to U/W 1,198,792 1,260,712
Other Revenues 364,959 153,971
Total Revenues 2,443,253 2,297,495
Deduct :
Commissions Paid 3,544,086 3,329,620
Allocated Administrative Expenses 4,583,580 4,097,907
Other expenses 744,842 703,187
Total Expenses 8,872,508 8,130,714
Underwriting Profit ( Loss ) 5,066,562 4,833,969
Insurance Commission of Jordan / the Eleventh Annual Report_2011 71 Table (2-2-14): Underwriting Profit (Loss) Account / Total Non- Life (Outside Branches)
of Jordanian Insurance Sector for the Year Ended 31/12/2011
Statement 2011 2010
Written Premiums
Direct Insurance 7,249,885 8,282,161
Reinsurance Accepted 115,948 67,182
Total Written Premiums 7,365,833 8,349,343
Deduct:
Local Reinsurance Share 4,130 20,330
Foreign reinsurance share 1,584,480 2,049,911
Net Written Premiums 5,777,223 6,279,102
Add :
Unearned Premium Provision 1/1 3,783,377 3,780,150
Deduct : Reinsurance Share 596,687 447,009
Net Unearned Premium Provision 1/1 3,186,690 3,333,141
Deduct :
Unearned Premium Provision 31/12 3,486,595 3,783,378
Deduct : Reinsurance Share 593,620 596,687
Net Unearned Premium Provision 2,892,975 3,186,691
Changes in Premium Deficiency reserve
Net Earned Premium Income 6,070,938 6,425,552
Cost of Claims
Claims Paid 3,988,793 4,011,181
Deduct :
Recoveries 909,764 885,667
Local Reinsurance Share 30,020 1,295
Foreign Reinsurance Share 209,563 100,580
Net Claims Paid 2,839,446 3,023,639
Add :
Outstanding Claims Provision 31/12 3,121,238 2,913,860
Deduct : Reinsurance Share 556,675 679,591
Deduct : Recoveries 238,192 0
Net Outstanding Claims Provision 31/12 2,326,371 2,234,269
Deduct :
Outstanding Claims Provision 1/1 3,288,080 2,814,519
Deduct : Reinsurer Share 679,591 402,512
Deduct : Recoveries 374,219 0
Net Outstanding Claims Provision 2,234,270 2,412,007
Cost of Claims Incurred 2,931,547 2,845,901
Underwriting Profit (Loss)
Add :
Commissions Received 406,024 433,104
Issuing Fees 241,474 343,208
Investment Income Attributable to U/W 00
Other Revenues 00
Total Revenues 647,498 776,312
Deduct :
Commissions Paid 467,704 517,536
Allocated Administrative Expenses 1,781,858 1,716,564
Other expenses 13,754 13,074
Total Expenses 2,263,316 2,247,174
Underwriting Profit ( Loss ) 1,523,573 2,108,789
Insurance Commission of Jordan / the Eleventh Annual Report_2011 72 Table (2-2-15):Underwriting Profit (Loss) Account / Total Life (Outside Branches)
of Jordanian Insurance Sector for the Year Ended 31/12/2011
Statement 2011 2010
Written Premiums
Direct Insurance 116,930 124,311
Total Written Premiums 116,930 124,311
Deduct:
Foreign reinsurance share 45,845 55,804
Net Written Premiums 71,085 68,507
Add :
Mathematical Provision 1/1 399,515 386,472
Deduct : Reinsurance Share 24,370 23,575
Net Mathematical Provision 1/1 375,145 362,897
Deduct :
Mathematical Provision 31/12 450,896 399,515
Deduct : Reinsurance Share 23,968 24,370
Net Mathematical Provision 31/12 426,928 375,145
Net Earned Premium Income 19,302 56,259
Cost of Claims
Claims Paid 3,944 37,946
Maturity & Surrender of Policies 40,137 11,720
Deduct :
Foreign Reinsurance Share 1,773 1,000
Net Claims Paid 42,308 48,666
Add :
Outstanding Claims Provision 31/12 26,281 27,290
Deduct : Reinsurance Share 709 1,683
Net Outstanding Claims Provision 31/12 25,572 25,607
Deduct :
Outstanding Claims Provision 1/1 27,290 41,613
Deduct : Reinsurer Share 1,683 2,683
Net Outstanding Claims Provision 25,607 38,930
Cost of Claims Incurred 42,273 35,343
Underwriting Profit (Loss)
Add :
Commissions Received 11,207 14,758
Issuing Fees 2,157 1,753
Investment Income Attributable to U/W -7,523 17,415
Other Revenues -1,550 1,196
Total Revenues 4,291 35,122
Deduct :
Commissions Paid 4,460 4,969
Allocated Administrative Expenses 42,926 36,855
Total Expenses 47,386 41,824
Underwriting Profit ( Loss ) -66,066 14,214
Insurance Commission of Jordan / the Eleventh Annual Report_2011 73 Table (2-2-16): Selected Figures for Jordanian Insurance Companies for the year ended 2011
Name of Undertaking Total Investments Total Assets Technical Provision Shareholders' Equity Total Premiums Written In-Jordan Gross Claims Paid In-Jordan tal Premiums Written-Outside Branc Gross Claims Paid-Outside Branches Net Profit before Tax
Arab German Insurance 9,415,189 31,737,742 5,719,124 5,355,197 23,363,341 37,318,488 0 0 -4,384,754
Arab Jordanian Insurance Group 2,623,948 13,437,998 5,726,425 4,235,461 8,437,198 7,659,495 0 0 -1,037,044
Al Nisr Insurance 33,008,059 40,791,867 18,503,848 18,384,755 20,809,076 11,154,516 0 0 1,050,376
American Life Insurance 63,940,314 71,615,426 49,045,751 16,857,348 16,227,924 7,691,232 0 0 5,915,307
Arab Orient Insurance 20,721,729 60,125,256 23,034,415 23,115,107 66,102,873 47,036,723 0 0 4,163,187
Jordan Emaretes Insurance 4,095,725 12,158,999 7,061,883 2,532,698 15,150,173 13,924,220 0 0 -3,301,594
Euro Arab Insurance Group 10,646,891 17,622,796 8,399,829 5,582,803 14,410,001 14,135,760 0 0 -2,986,949
Arab Assurers 4,847,971 12,194,574 5,515,835 2,682,574 8,159,662 10,861,769 0 0 707,416
Al-Barakah Takaful 1,212,202 4,186,433 5,390,627 -2,864,052 4,566,196 5,739,035 0 0 -2,657,107
Arab Life and Accident Insurance 13,386,836 21,755,536 9,706,692 8,726,678 12,047,945 9,100,731 1,661,093 913,229 -199,558
Al-Manara Insurance 12,243,933 19,230,843 7,253,815 10,121,078 9,087,522 9,740,216 0 0 -3,161,158
Arab Union International Insurance 12,664,027 19,915,707 10,844,850 6,715,506 11,750,672 13,324,468 0 0 -2,745,310
Delta Insurance 9,651,533 15,351,624 3,620,403 9,249,132 8,120,332 4,502,141 0 0 55,299
General Arabia Insurance 10,440,616 19,847,264 6,913,771 9,959,018 13,699,951 8,764,030 0 0 23,055
Gerassa Insurance 2,171,807 2,501,148 828,173 1,429,109 78,718 1,140,081 0 0 -290,850
Holy Land Insurance 3,344,248 6,708,318 3,036,481 2,703,286 5,534,587 9,996,646 0 0 -254,498
Islamic Insurance 18,510,879 23,396,678 5,189,558 14,987,339 16,175,990 11,125,989 0 0 1,370,675
Jerusalem Insurance 16,683,990 22,258,251 7,959,871 11,481,063 11,944,493 7,931,071 0 0 1,121,480
Jordan French Insurance 3,900,033 18,902,843 6,033,375 5,361,646 20,721,851 16,396,209 0 0 -949,670
Jordan Insurance 50,475,712 76,845,633 17,818,924 44,286,066 40,465,349 28,523,650 5,821,670 3,119,645 3,044,170
Jordan International Insurance 25,063,649 35,346,762 7,684,812 21,281,552 17,815,221 12,910,246 0 0 -1,051,306
Middle East Insurance 58,748,376 69,066,209 11,972,971 31,543,782 29,264,988 13,976,356 0 0 151,622
National Insurance 8,007,330 13,783,802 5,385,348 6,412,957 10,784,193 7,387,697 0 0 -624,952
Philadelphia Insurance 8,058,377 10,207,289 5,261,462 4,222,470 6,940,891 4,277,997 0 0 -148,891
United Insurance 14,265,061 21,833,006 6,628,277 11,073,026 13,297,847 9,544,140 0 0 365,375
Al Yarmouk Insurance 9,232,540 13,147,611 1,700,440 9,182,356 8,462,975 6,090,894 0 0 156,942
Med Gulf Insurance 5,101,295 18,634,206 5,305,883 7,020,293 9,242,129 8,560,648 0 0 -1,806,073
First Insurance 22,544,175 30,618,978 3,332,526 25,070,552 14,017,695 6,428,052 0 0 1,002,261
Total 455,006,445 723,222,799 254,875,369 316,708,800 436,679,793 345,242,500 7,482,763 4,032,874 -6,472,549
Insurance Commission of Jordan / the Eleventh Annual Report_2011 74 Table (2-2-16): Selected Figures for Jordanian Insurance Companies for the year ended 2011
(Loss Ratio ) (Operating Profit Margin) (Retention Ratio) Return on Assets Return on Equity Name of Undertaking Market Share of Gross Written Premiums Inside Jordan 12 345
Arab German Insurance 112.7% -6.9% 61.4% -13.8% -81.9% 5.4%
Arab Jordanian Insurance Group 93.6% -5.2% 86.2% -7.7% -24.5% 1.9%
Al Nisr Insurance 90.0% 4.6% 68.6% 2.6% 5.7% 4.8%
American Life Insurance 57.3% 18.2% 91.2% 8.3% 35.1% 3.7%
Arab Orient Insurance 84.4% 9.7% 43.4% 6.9% 18.0% 15.1%
Jordan Emaretes Insurance 116.5% -15.9% 77.3% -27.2% -130.4% 3.5%
Euro Arab Insurance Group 109.3% -18.1% 71.7% -16.9% -53.5% 3.3%
Arab Assurers 94.8% 9.3% 78.0% 5.8% 26.4% 1.9%
Al-Barakah Takaful 127.7% -47.8% 92.8% -63.5% N.A 1.0% Arab Life and Accident Insurance 80.8% 0.6% 73.9% -0.9% -2.3% 2.8%
Al-Manara Insurance 123.2% -32.8% 83.8% -16.4% -31.2% 2.1%
Arab Union International Insurance 116.7% -21.1% 82.2% -13.8% -40.9% 2.7%
Delta Insurance 100.0% -0.9% 48.9% 0.4% 0.6% 1.9%
General Arabia Insurance 79.6% 1.4% 54.2% 0.1% 0.2% 3.1%
Gerassa Insurance 3269.4% -447.3% 6.3% -11.6% -20.4% 0.0%
Holy Land Insurance 89.2% -5.5% 85.7% -3.8% -9.4% 1.3%
Islamic Insurance 75.4% 2.8% 60.4% 5.9% 9.1% 3.7%
Jerusalem Insurance 78.2% 7.2% 70.6% 5.0% 9.8% 2.7%
Jordan French Insurance 82.4% -2.3% 64.4% -5.0% -17.7% 4.7%
Jordan Insurance 77.3% 4.1% 44.8% 4.0% 6.9% 9.3% Jordan International Insurance 116.7% -2.6% 39.8% -3.0% -4.9% 4.1%
Middle East Insurance 77.6% 4.6% 38.6% 0.2% 0.5% 6.7%
National Insurance 93.4% -5.3% 61.7% -4.5% -9.7% 2.5%
Philadelphia Insurance 87.7% 0.6% 80.5% -1.5% -3.5% 1.6%
United Insurance 86.7% 1.2% 61.6% 1.7% 3.3% 3.0%
Al Yarmouk Insurance 103.2% 1.0% 25.2% 1.2% 1.7% 1.9%
Med Gulf Insurance 110.8% -14.8% 85.1% -9.7% -25.7% 2.1%
First Insurance 80.0% 2.2% 42.3% 3.3% 4.0% 3.2% Total 94.3% -0.5% 59.3% -0.9% -2.0% 100.0%
1 -Loss ratio (for non-life written premiums inside Jordan) = net claims cost / net earned premiums
2 - Operating profit margin (for written premiums inside Jordan) = net technical profit / gross written premiums.
3 - Retention ratio (for written premiums inside Jordan) = net written premiums / gross written premiums.
4 - Return on assets = net profit before tax / total assets
5 - Return on equity = net profit before tax / shareholders' equity
Insurance Commission of Jordan / the Eleventh Annual Report_2011 75 Table (2-2-17): Premiums & Claims per Insurance Class for the Year Ended 2011
Motor Marine & Transport Aviation Fire & Other Damage to Property Liability
Total Written Total Written Total Written Total Written Total Written Name of Undertaking Total Claims Total Claims Total Claims Total Claims Total Claims
Premiums Paid Premiums Paid Premiums Paid Premiums Paid Premiums Paid
Arab German Insurance 8,602,707 12,910,928 498,455 113,562 1,280,340 0 1,445,661 5,661,811 1,018,071 175,665
Arab Jordanian Insurance Group 7,297,968 6,739,011 173,415 22,958 0 0 277,079 294,704 0 0
Al Nisr Insurance 4,925,822 4,824,510 661,090 171,054 33,454 0 1,590,596 348,914 601,582 22,689
American Life Insurance 0000000000
Arab Orient Insurance 14,840,958 15,994,475 1,639,006 187,339 36,602 0 4,859,541 1,477,468 641,104 34,885
Jordan Emarets Insurance 10,321,346 11,401,840 1,292,696 193,262 0 0 797,798 317,414 41,877 0
Euro Arab Insurance Group 5,427,974 8,227,342 252,165 115,041 1,923,283 0 701,216 558,565 167,608 2,069
Arab Assurers 5,386,602 8,911,623 351,053 299,339 0 0 689,433 390,158 36,804 1,329
Al-Barakah Takaful 4,327,667 5,409,530 116,298 83,665 0 0 46,378 11,459 1,700 1,344
Arab Life and Accident Insurance 9,211,035 6,589,236 642,715 193,343 0 0 781,995 493,542 62,098 3,885
Al-Manara Insurance 7,512,264 9,172,258 267,155 125,171 -285,858 0 518,389 118,496 153,037 4,523
Arab Union International Insurance 9,348,985 11,196,893 295,121 62,338 0 0 175,534 20,872 0 0
Delta Insurance 4,195,297 2,814,340 603,966 354,180 0 0 1,502,549 229,502 526,890 65,946
General Arabia Insurance 6,567,261 4,455,698 687,287 54,739 0 0 2,195,864 880,752 0 0
Gerassa Insurance 0 943,630 1,490 0 0 0 1,275 143,402 -2,927 8,218
Holy Land Insurance 5,261,423 9,731,149 10,792 2,500 0 0 238,807 256,308 23,565 6,689
Islamic Insurance 6,533,977 6,835,009 918,201 14,032 0 0 2,148,706 197,306 0 0
Jerusalem Insurance 7,257,297 5,844,711 2,244,628 511,255 0 0 1,188,639 640,457 65,554 12,482
Jordan French Insurance 8,378,746 9,092,109 983,890 78,761 2,518,665 0 883,933 283,538 82,840 3,945
Jordan Insurance 11,652,683 9,227,698 1,551,049 918,736 0 0 11,640,260 6,744,679 1,522,616 18,229
Jordan International Insurance 5,431,626 5,865,873 1,346,445 701,611 0 0 4,434,669 299,115 113,303 14,579
Middle East Insurance 7,573,193 8,097,861 6,479,624 298,891 737,422 37,342 7,067,721 1,364,630 630,660 2,486
National Insurance 6,143,623 5,748,662 324,573 38,128 0 0 2,486,169 435,656 169,828 180
Philadelphia Insurance 6,457,992 3,787,108 41,752 213 0 0 84,737 43,822 4,923 11,002
United Insurance 7,847,905 5,977,867 448,126 217,717 0 0 1,989,706 842,463 133,563 11,513
Al Yarmouk Insurance 1,916,125 2,612,970 1,274,302 114,438 0 0 3,925,588 2,238,300 193,051 7,513
Med Gulf Insurance 5,277,175 4,480,941 282,570 32,624 0 0 1,069,005 336,895 125,669 8,361
First Insurance 6,126,877 3,886,812 463,018 60,850 643,239 0 4,627,809 938,787 69,997 80,214
Total 183,824,528 190,780,084 23,850,882 4,965,747 6,887,147 37,342 57,369,057 25,569,015 6,383,413 497,746
Loss Ratio 100.3% 19.0% -47.6% 30.4% 26.7%
Insurance Commission of Jordan / the Eleventh Annual Report_2011 76 Table (2-2-17): Premiums & Claims per Insurance Class for the Year Ended 2011
Credit & Suretyship Medical Other General Classes Total Life Total Total Written Total Written Total Written Total Written Total Written Name of Undertaking Total Claims Total Claims Total Claims Total Claims Total Claims
Premiums Paid Premiums Paid Premiums Paid Premiums Paid Premiums Paid
Arab German Insurance 0 0 8,861,145 16,970,226 172,710 266,801 1,484,252 1,219,495 23,363,341 37,318,488
Arab Jordanian Insurance Group 0 0 476,379 527,949 60,155 42,962 152,202 31,911 8,437,198 7,659,495
Al Nisr Insurance 0 0 5,484,693 4,353,284 251,873 41,482 7,259,966 1,392,583 20,809,076 11,154,516
American Life Insurance 0 0 2,633,383 1,982,295 1,637,577 136,409 11,956,964 5,572,528 16,227,924 7,691,232
Arab Orient Insurance 0 0 39,318,303 28,805,750 4,767,359 536,806 0 0 66,102,873 47,036,723
Jordan Emarets Insurance 0 0 2,558,994 2,007,227 137,462 4,477 0 0 15,150,173 13,924,220
Euro Arab Insurance Group 0 0 4,618,811 4,531,223 107,922 83,287 1,211,022 618,233 14,410,001 14,135,760
Arab Assurers 68,222 176,811 1,164,961 975,073 183,539 874 279,048 106,562 8,159,662 10,861,769
Al-Barakah Takaful 0 0 67,735 231,410 6,418 1,627 0 0 4,566,196 5,739,035
Arab Life and Accident Insurance 0 734,301 579,491 513,003 108,782 32,303 661,829 541,118 12,047,945 9,100,731
Al-Manara Insurance 0 0 339,824 270,596 582,711 49,172 0 0 9,087,522 9,740,216
Arab Union International Insurance 0 0 1,886,137 2,042,010 44,895 2,355 0 0 11,750,672 13,324,468
Delta Insurance 30,496 0 1,124,216 967,071 100,623 6,476 36,295 64,626 8,120,332 4,502,141
General Arabia Insurance 0 0 2,366,449 2,596,453 457,499 112,406 1,425,591 663,982 13,699,951 8,764,030
Gerassa Insurance 0 0 78,880 44,831 0 0 0 0 78,718 1,140,081
Holy Land Insurance 0 0 0 0 0 0 0 0 5,534,587 9,996,646
Islamic Insurance 0 0 4,075,979 3,266,863 310,005 28,726 2,189,122 784,053 16,175,990 11,125,989
Jerusalem Insurance 0 0 997,927 744,054 54,617 10,268 135,831 167,844 11,944,493 7,931,071
Jordan French Insurance 356,291 0 5,371,335 5,351,060 1,341,194 1,119,610 804,957 467,186 20,721,851 16,396,209
Jordan Insurance 0 0 5,172,151 3,386,995 95,906 144,115 8,830,684 8,083,198 40,465,349 28,523,650
Jordan International Insurance 0 0 5,660,166 5,578,500 11,350 1,052 817,662 449,516 17,815,221 12,910,246
Middle East Insurance 0 0 3,604,468 3,193,734 340,257 21,135 2,831,643 960,277 29,264,988 13,976,356
National Insurance 0 0 1,322,542 1,044,563 0 0 337,458 120,508 10,784,193 7,387,697
Philadelphia Insurance 0 0 346,913 435,811 4,574 41 0 0 6,940,891 4,277,997
United Insurance 0 0 2,532,419 2,401,014 17,511 384 328,617 93,182 13,297,847 9,544,140
Al Yarmouk Insurance 0 0 952,006 1,041,579 145,542 8,310 56,361 67,784 8,462,975 6,090,894
Med Gulf Insurance 0 0 2,430,734 3,689,827 56,976 12,000 0 0 9,242,129 8,560,648
First Insurance 0 0 1,862,775 1,408,638 223,980 52,751 0 0 14,017,695 6,428,052
Total 455,009 911,112 105,888,816 98,361,039 11,221,437 2,715,829 40,799,504 21,404,586 436,679,793 345,242,500
Loss Ratio -64.5% 91.5% 37.7% ** 94.3%
Insurance Commission of Jordan / the Eleventh Annual Report_2011 77 Table (2-2-18):Selected Figures for Jordanian Insurance Sector for the Last Ten Years
Milion JD
Items 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
169.0 214.2 264.9 410.1 408.0 462.5 479.6 484.6 473.9 455.0 Total Investments
260.5 308.5 366.1 526.2 548.0 636.6 678.0 695.5 718.7 723.2 Total Assets
123.4 131.6 143.2 156.2 170.8 188.6 202.6 216.3 237.3 254.9 Technical Provisions
90.9 124.1 161.4 277.2 285.1 330.6 355.4 359.1 353.6 316.7 Shareholders' Equity
146.9 171.5 191.4 219.3 258.7 291.6 333.0 365.2 408.6 436.7 Gross Written Premiums Inside Jordan
94.0 114.2 126.9 139.3 158.1 179.3 202.7 217.7 253.3 258.8 Net Written Premiums Inside Jordan
86.0 107.7 123.9 142.8 174.5 207.6 219.0 263.0 282.1 345.2 Gross Claims Paid for Premiums written Inside Jordan
12.6 22.0 40.0 90.6 21.5 15.5 22.6 7.3 15.9 -6.5 Net Profit before Tax
Items 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
- 204.6% 231.4% 263.2% 289.1% 299.7% 311.8% 293.5% 280.9% 233.5% Solvency Margin
64.0% 66.6% 66.3% 63.5% 61.1% 61.5% 60.9% 59.6% 62.0% 59.3% Retention Ratio
Loss Ratio (Non-life Insurance) 75.8% 78.3% 78.5% 79.5% 85.1% 85.1% 82.9% 89.0% 85.4% 94.3%
21.3% 13.3% 12.9% 13.7% 15.0% 13.4% 10.8% 10.3% 13.1% 9.7% Expense Ratio (Non-life Insurance)
4.8% 7.1% 10.9% 17.2% 3.9% 2.4% 3.3% 1.1% 2.2% -0.9% Return on Assets
13.9% 17.7% 24.8% 32.7% 7.5% 4.7% 6.4% 2.0% 4.5% -2.0% Return on Shareholders' Equity
135.7% 106.0% 88.7% 56.4% 59.9% 57.1% 57.0% 60.2% 67.1% 80.5% Technical Provisions/ Shareholders' Equity
64.9% 69.4% 72.4% 77.9% 74.5% 72.7% 70.7% 69.7% 65.9% 62.9% Total Investments/ Total Assets
Insurance Commission of Jordan / the Eleventh Annual Report_2011 78
Table (2-2-19): Insurance Business Licenses Table General Insurance Business Licenses Life Insurance Business Licenses
No License No License Motor Insurance License Life Assurance License 1 10 Marine & Transport Insurance License Marriage & Birth Assurance License 2 11 Aviation Insurance License Annuities or Pension Assurance Insurance 3 12 License Fire & Other Damages to Property Insurance Investment Linked Assurance License 4 13 License Liability Insurance License Permanent Health Assurance License 5 14 Credit Insurance Class License Management of Group Pension Funds license 6 15 Accidents Insurance Class License/ Additional 7 Insurances license* Medical Insurance License 8 Travel Insurance License 9
* Additional insurance license represents accidents insurance, and it’s granted to the specialized life companies.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 79 Table (2-2-20): List of Licenses Given to Insurance Companies
Number of Licenses Given to Companies As in The Insurance Business Licenses Table Company Name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Arab union international * * * * * * * * Insurance Holy Land Insurance * * * * * * Jordan International * * * * * * * * * * * * Insurance Jordan French Insurance * * * * * * * * * * * * * American Life Insurance * * * * * * Al-Manara Insurance * * * * * * * * Jordan Insurance * * * * * * * * * * * * Islamic Insurance * * * * * * * * * * * * General Arabia Insurance * * * * * * * * * * * * National Insurance * * * * * * * * * * * * Gerassa Insurance * * * * * * Delta Insurance * * * * * * * * * * * * * Middle East Insurance * * * * * * * * * * * * Arab Orient Insurance * * * * * * * * Arab Assurers * * * * * * * * * * * * * Arab Life & Accident * * * * * * * * * * * * * Insurance Arab German Insurance * * * * * * * * * * * * Al Barakah Takaful * * * * * * * Company Philadelphia Insurance * * * * * * * Jerusalem Insurance * * * * * * * * * * * * United Insurance * * * * * * * * * * * * Arab Jordanian Insurance * * * * * * * * * * * * Group Euro Arab Insurance * * * * * * * * * * * * Group Al Nisr Insurance * * * * * * * * * * * * Jordan Emirates Insurance * * * * * * * * Al Yarmouk Insurance * * * * * * * * * * * * Med Gulf Insurance * * * * * * * First Insurance * * * * * * * *
Insurance Commission of Jordan / the Eleventh Annual Report_2011 80 Figure (2-2-1):Jordanian Insurance Sector Growth 2002- 2011
450.0
400.0
350.0
300.0
250.0
200.0 Milion JD 150.0
100.0
50.0
0.0
-50.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Gross Written Premiums Gross Claims Paid Net Profit before Tax
Insurance Commission of Jordan / the Eleventh Annual Report_2011 81 Figure (2-2-2):Gross Premiums/ Gross Calims for the Insurance Sector 2011
190,780
183,825 200,000
180,000
160,000
140,000 105,889 120,000 98,361 100,000
Thousand JD 80,000 57,369 60,000 40,800 25,569 40,000 23,851 21,405 6,887 11,221 20,000 4,966 6,383 2,716 37 498 455 911 - Motor Marine & Aviation Fire & Other Liability Credit & MedicaL Other Total Life Transport Damage to suretyship General Assurance Property Classes Gross Written Premiums Gross Claims Paid
Insurance Commission of Jordan / the Eleventh Annual Report_2011 82 Figure (2-2-3): Net Retention of Insurance Companies for Jordanian Insurance Sector for the Year 2011
100%
80%
60%
40%
20%
0%
-20% Motor Marine & Aviation Fire & Other Liability Credit Medical Other Total Life Total Market Transport Damage to General Assurance Property Classes Net Written Premiums Local Reinsurance Ceded Foreign Reinsurance Ceded
Insurance Commission of Jordan / the Eleventh Annual Report_2011 83 Figure (2-2-4): Gross Written Premiums for Jordanian Insurance Sector for the Year 2011
Total Life Assurance 9.3% Other General Classes 2.6% Motor 42.1%
Medical 24.2%
Credit & suretyship 0.1% Marine & Transport Liability 5.5% 1.5% Fire & Other Damage to Property Aviation 13.1% 1.6%
Insurance Commission of Jordan / the Eleventh Annual Report_2011 84 Figure (2-2-5): Gross Claims Paid for Jordanian Insurance Sector for the Year 2011
Motor 55.26%
Marine & Transport 1.44%
Aviation 0.011% Total Life Assurance 6.20% Fire & Other Damage to Property 7.41%
Other General Classes Credit & suretyship MedicaL 0.79% Liability 0.26% 28.49% 0.14%
Insurance Commission of Jordan / the Eleventh Annual Report_2011 85 Figure (2-2-6): Technical Profit & Loss for Jordanian Insurance Sector 2010 - 2011
10000 5,067 4,905 3,966 3,968 3,757 4,834 2,851 2,252 5000 1,553 1,899 824 722 653 767 61 0 -404
-5000 -4,422
-10000 Thousand JD Thousand Thousand JD
-15000
-20000 -20,513
-25000 Motor Marine & Aviation Fire & Other Liability Credit & Medical Other General Total Life Transport Damage to suretyship Classes Assurance Property
2011 2010
Insurance Commission of Jordan / the Eleventh Annual Report_2011 86 Figure (2-2-7): Total Jordanian Insurance Sector Investment for the Year 2011
Investments in Subsidiary & Loans Associates 1.5% 0.2% Other Investments 0.006%
Property Investments Deposites at Banks 19.3% 39.1%
Financial Assets at Amortized Cost 13.6%
Financial Assets at Fair value Financial Assets at Fair value Throgh Profit or loss Throgh Comprehansive Income 9.7% 16.6%
Insurance Commission of Jordan / the Eleventh Annual Report_2011 87 Figure (2-2-8): Total Assets per Company for the Year 2011
Other Insurance Companies First Insurance 36.1% 4.2% Arab German Insurance 4.4%
Middle East Insurance 9.5% Al Nisr Insurance 5.6%
Jordan International Insurance 4.9% American Life Insurance 9.9%
Jordan Insurance Arab Orient Insurance 10.6% 8.3%
Jerusalem Insurance Islamic Insurance 3.1% 3.2%
Insurance Commission of Jordan / the Eleventh Annual Report_2011 88 Figure (2-2-9): Net Profit before Tax per Company for the Year 2011 Highest Ten Companies 5,915,307
6,000,000
5,000,000 4,163,187
4,000,000 3,044,170
3,000,000
2,000,000 1,370,675 1,121,480 1,050,376 1,002,261 707,416
1,000,000 365,375 156,942
0 Insurance Insurance Arab Orient Insurance Al Yarmouk American Life American First Insurance Arab Assurers Jordan Insurance United Insurance Al Nisr Insurance Islamic Insurance Jerusalem Insurance
Insurance Commission of Jordan / the Eleventh Annual Report_2011 89 The following charts represent the market share for the largest 10 insurance companies in the Jordanian Insurance Sector:
Gross Written Premiums 2011 Gross Written Premiums / Motor 2011 Gross Written Premiums / Marine & Transport 2011 Gross Written Premiums / Fire & Other Damage to Property 2011 Gross Written Premiums / Liability 2011 Gross Written Premiums / Medical 2011 Gross Written Premiums / Other General Classes 2011 Gross Written Premiums / Total Life 2011
Insurance Commission of Jordan / the Eleventh Annual Report_2011 90 Figure (2-2-10):Gross Written Premiums for Jordanian Market for the Year 2011
Arab German Insurance Al Nisr Insurance 5.4% 4.8% American Life Insurance 3.7%
Other Insurance Companies Arab Orient Insurance 39% 15.1%
Jordan Emarites Insurance 3.5%
Islamic Insurance 3.7% Middle East Insurance 6.7%
Jordan International Insurance Jordan French Insurance Jordan Insurance 4.1% 4.7% 9.3%
Insurance Commission of Jordan / the Eleventh Annual Report_2011 91 Figure (2-2-11):Gross Written Premiums / Motor 2011
Arab Orient Insurance Jordan Emarites Insurance Arab German Insurance 8.1% 5.6% 4.7%
Arab Life and Accident Insurance 5.0%
Arab Union International Insurance 5.1% Other Insurance Companies 52.2% Jordan French Insurance 4.6%
Jordan Insurance 6.3%
United Insurance Middle East Insurance 4.3% 4.1%
Insurance Commission of Jordan / the Eleventh Annual Report_2011 92 Figure (2-2-12):Gross Written Premiums / Marine & Transport 2011
Arab Orient Insurance Jordan Emarites Insurance General Arabia Insurance 6.9% 5.4% 2.9% Other Insurance Companies 22.8% Islamic Insurance 4%
Jerusalem Insurance 9.4%
Al Yarmouk Insurance 5.3% Jordan French Insurance 4.1%
Jordan Insurance 6.5% Middle East Insurance 27.2% Jordan International Insurance 5.6%
Insurance Commission of Jordan / the Eleventh Annual Report_2011 93 Figure (2-2-13):Gross Writtem Premiums / Fire & Other Damage to Property 2011
Arab Orient Insurance 8.5% General Arabia Insurance 3.8% Other Insurance Companies 20.9% Islamic Insurance 3.7%
First Insurance 8.1%
Jordan Insurance 20.3%
Al Yarmouk Insurance 6.8%
Jordan International Insurance 7.7% United Insurance Middle East Insurance 3.5% National Insurance 4.3% 12.3%
Insurance Commission of Jordan / the Eleventh Annual Report_2011 94 Figure (2-2-14):Gross Written Premiums / Liability 2011
Other Insurance Companies Arab German Insurance 14.3% 15.9% Al Yarmouk Insurance 3.0% Al Nisr Insurance 9.4%
National Insurance 2.7%
Arab Orient Insurance 10.0%
Middle East Insurance 9.9%
Euro Arab Insurance Group 2.6%
Jordan Insurance Delta Insurance 23.9% 8.3%
Insurance Commission of Jordan / the Eleventh Annual Report_2011 95 Figure (2-2-15): Gross Written Premiums / Medical 2011
Arab German Insurance Other Insurance Companies Al Nisr Insurance 8.4% 19.9% 5.2%
Middle East Insurance 3.4% American Life Insurance 2.5%
Jordan International Insurance 5.3%
Jordan Insurance 4.9% Arab Orient Insurance 37.1%
Jordan French Insurance Euro Arab Insurance Group 5.1% Islamic Insurance 4.4% 3.8%
Insurance Commission of Jordan / the Eleventh Annual Report_2011 96 Figure (2-2-16): Gross Written Premiums / Other General Insurance Cluases 2011
American Life Insurance Arab Orient Insurance 14.6% 42.5%
Arab Assurers 1.6%
Al Nisr Insurance 2.2%
Al-Manara Insurance 5.2%
Other Insurance Companies 10.0% General Arabia Insurance 4.1%
First Insurance Islamic Insurance 2.0% 2.8% Middle East Insurance Jordan French Insurance 3.0% 12.0%
Insurance Commission of Jordan / the Eleventh Annual Report_2011 97 Figure (2-2-17): Gross Written Premiums / Total Life Assurance 2011
American Life Insurance Euro Arab Insurance Group 29.3% 3.0%
General Arabia Insurance 3.5% Al Nisr Insurance 17.8%
Islamic Insurance 5.4%
Jordan French Insurance 2.0% Arab German Insurance 3.6%
Other Insurance Companies Jordan Insurance 4.9% Jordan International Insurance 21.6% Middle East Insurance 2.0% 6.9%
Insurance Commission of Jordan / the Eleventh Annual Report_2011 98 23
Third: Business Results of Insurance Supporting 1 Service Providers 2011
The Sector of Insurance Supporting Service Providers includes (583) insurance agents, (114) insurance brokers, (56) loss adjusters and surveyors, (15) actuaries, (15) companies administrating insurance business, (29) insurance consultants, (15) reinsurance agents, (10) licensed bancassurance and (1) authorized underwriter. Approval was granted to (32) reinsurance agents residing outside the Kingdom to enable them to do reinsurance business in the Kingdom. All of these deliver all insurance services that support and complement the business of insurance companies.
Total insurance premiums realized in 2011 by insurance agents and brokers, bancassurance, direct sale and the unified bureau mounted to JD (424,759,633); an increase of (3.8%) compared with 2010 which marked JD (409,238,277).
Figure (2-3-1): Written Insurance in 2011 (as per Distribution Channels)
Insurance Bancassurance Unified Bureau Age nts 0.7% 18.8% 19.1% Insurance Brokers 8.2%
Direct Sale 53.2%
Total deliverables of insurance agents and brokers and bancassurance totaled JD (118,947,598); (28%) of the totally realized premiums as illustrated in the figure above.
1 Preliminary Data
Insurance Commission of Jordan / the Eleventh Annual Report_2011 99 1. Insurance Agents
Insurance agents licensed at IC totaled (583) at the end of 2011 against (514) at the end of 2010; i.e. an increase of (13.4%).
Figure (2-3-2): Progression of the Number of Insurance Agents
583 600 505 514 415 450 500
400
300
200
100
0 2007 2008 2009 2010 2011
Insurance Agents
On the other hand, there are (583) insurance agents deployed in (28) insurance companies in the Kingdom and practice general insurance or life insurance business as illustrated in the following figure.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 100 Figure (2-3-3): Number of Insurance Agents at Insurance Companies
300 282
250
200
150
100 56 47 50 16 15 12 11 11 11 11 10 10 10 9 9 8 7 7 66554 4 4 3 3 1 0
AmericanLifeIns Co ALICO Mi ddl e East Ins Co ArabGermanIns Co
Arab Orient Ins Co JerusalemIns Co HolyLandIns Co
JordanFrenchIns Co ArabLife&Accident Ins Co TheUnitedIns Co
Al Manara Ins Co JordanInsuranceCo Arab Assurers Co
Al BarakahTakaful Ins Co National Ins Co ArabUnionInternational Ins Co
Al Nisr Al Arabi Ins Co PhiladelphiaIns Co First Ins Co
General ArabiaIns Co YarmoukIns Co JordanEmiratesIns Co
Delta Ins Co Gerasa Ins Co EuroArabIns GroupCo
ArabJordanianIns GroupCo JordanInternational Ins Co IslamicIns Co
MediterraneanandGulf Ins Co MedGulf
Total production achieved by insurance agents in all branches and licenses of insurance mounted to JD (81,136,282); (19.1%) of total underwritten insurance premiums. Compared with 2010, the production volume of insurance brokers marked a decrease of (4.4%) in 2011. Production of insurance agents was concentrated in the branches of vehicles, medical and life insurance which represented (85.5%) of total production of insurance agents.
Table (2-3-1): Progression of the Insurance Agents’ Business Growth Percentage to Production of Insurance Agents (JD)* Rate Total Production Insurance License % of Agents in 2010 2011 2011 % Motor 41,519,472 43,901,648 5.7% 54.1% Marine and Transport 3,086,140 2,526,695 -18.10% 3.1% Fire and other Damages to Property 3,913,005 3,669,910 -6.2% 4.5% Aviation 24,135 16,464 -31.8% 0.0% Credit and Guarantees 21,233 0 -100.0% 0.0% Medical 18,359,437 15,538,209 -15.4% 19.2% Other General Insurance Types 2,447,460 5,612,389 129.3% 6.9% Life 15,519,285 9,870,967 -36.4% 12.2% TOTAL 84,890,167 81,136,282 -4.4% 100.0% JD 1= USD 1.41
Insurance Commission of Jordan / the Eleventh Annual Report_2011 101
Figure (2-3-4): Insurance Agents Production per Insurance license for 2011
Life Other General 12.2% Insurance Types 6.9%
Motor Medical 54.1% 19.2%
Aviation Marine and 0.02% Fire and other Transport Damages to 3.1% Property 4.5%
2. Insurance Brokers
Insurance brokers counted for (114) with (99) of them active brokers and (15) non-active brokers. Compared with 2010, the number of insurance brokers marked a 16.3% increase.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 102 Figure (2-3-5): Progressive Numbers of Insurance Brokers
114 120 98 100 82 80 70 56 60
40
20
0 2007 2008 2009 2010 2011
Table (2-3-2): Active Insurance Brokers to Non-Active Brokers
2010 2011 Active Insurance Brokers 85 99 Non-Active Insurance Brokers 13 15 TOTAL 98 114
Total production of insurance brokers mounted to JD (34,960,277); (8.2%) of total underwritten insurance premiums. Compared with 2010, the production volume marked an increase of (2%). The following table illustrates the development of production of insurance brokers in different insurance branches for 2011 compared with 2010.
Table (2-3-3) Progression of Insurance Brokers Production Percentage to Production of Insurance Brokers Total (JD)* Growth Insurance License Production by Rate % Brokers for 2010 2011 2011 % Motor 12,343,318 12,589,315 1.75% 36.01% Marine and Transport 3,537,376 3,580,898 1.23% 10.24% Fire and other Damages to Property 6,263,708 3,140,103 -49.87% 8.98% Aviation 0 33,454 - 0.10%
Insurance Commission of Jordan / the Eleventh Annual Report_2011 103 Percentage to Production of Insurance Brokers Total (JD)* Growth Insurance License Production by Rate % Brokers for 2010 2011 2011 % Credit and Guarantees 34,787 0 -100.00% 0.00% Medical 8,234,997 9,827,521 19.34% 28.11%
Other General Insurance Types 889,284 1,563,425 75.81% 4.47%
Life 2,945,824 4,225,561 43.44% 12.09%
TOTAL 34,279,294 34,960,277 1.99% 100% *JD 1=USD 1.41
The production by insurance brokers was concentrated in the branches of motor, medical, fire and other damages to property which represented (73.1%) of total production by insurance brokers.
Figure (2-3-6): Insurance Brokers Production per Insurance License for 2011
Other General Life Insurance Types 12.1% 4.5% Motor 36.0%
Medical 28.1% Aviation Fire and other Marine and 0.1% Damages to Transport Property 10.2% 9%
3. Bancassurance
In 2005, IC issued the first license to do bancassurance business in the Kingdom. Volume of bancassurance premiums mounted to JD 15.670 in that year. In 2011, however, premiums of bancassurance mounted to JD 2.851.040; 0.7% of total underwritten insurance premiums. Compared with 2010, premiums realized from bancassurance marked an increase of 60% against 61% and 59% for life and general insurance, respectively.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 104 Table (2-3-4): Progression of Bancassurance Production in 2007-2011 Production of Bancassurance (JD) Percentage Total
Bancassurance 2007 2008 2009 2010 2011 for 2011 %
Life Insurance 1,043,793 750,290 997,070 1,215,941 1,963,111 68.9%
General Insurance 280,625 140,079 442,510 555,230 887,929 31.1%
TOTAL 1,324,418 890,369 1,439,580 1,771,171 2,851,040 100%
JD1= USD 1.41
Figure (2-3-7): Progression of Bancassurance Production
1,963,111
2,000,000
1,750,000
1,500,000 1,215,941
1,043,793 1,250,000 997,070 887,929
1,000,000 750,290 JD
750,000 555,230 442,510 500,000 280,625
140,079 250,000
0 2007 2008 2009 2010 2011
Life Insurance General Insurance
Insurance Commission of Jordan / the Eleventh Annual Report_2011 105 Figure (2-3-8): Bancassurance Production per Insurance Type for 2011
Life Insurance 68.9% General Insurance 31.1%
4. Companies Administrating Insurance Business
Balance of assets of Companies Administrating Insurance Business that manage the medical insurance portfolios for some insurance companies and some self-financed funds raised from JD15 million in 2010 to JD19 million in 2011. Balance of net equity rights for these managers increased to reach JD12.4 million against JD8.75 million for 2010. Subscribers to insurance portfolios for insurance companies and self-financed funds managed by Companies Administrating Insurance Business reached about 300.000 subscribers.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 106 Table (2-3-5): Consolidated Balance Sheet of Companies Administrating Insurance Business as at 31st of Dec. 2011
2010 2011 Assets Current Assets Cash on hand and at banks 3,076,409 3,848,162 Receivable Notes and Post-Dated Checks 16,396 175,000 Account Receivable 7,439,566 11,173,185 Inventory 25,558 18,218 Other current assets 995,450 1,530,219 Total current assets 11,553,379 16,744,784 Fixed assets Gross Fixed Assets 3,826,932 2,268,005 Accumulated Depreciation 1,664,797 40,813 Net Fixed Assets 2,162,135 2,227,192 Other Assets Financial Assets Available for Sale 150,000 0 Investments 1,137,416 549,668 Total Assets 15,002,930 19,521,644 Liabilities and Equity Rights Current Liabilities Banks payable 237,277 276,805 Payable Notes 867,956 15,509 Account Payable 2,361,731 4,086,952 Income Tax Provision 145,479 63,826 Accrued Expenses 16,704 13,953 Other Current Liabilities 2,614,864 2,261,963 Total Current Liabilities 6,244,011 6,719,008 Shareholders Equity Capital 8,242,546 12,330,000 Reserves 460,386 603,289 Partners’ Current Account -279,380 -568,375 Accumulative Change in the Fair Value 0 -108,000 Accumulative Profit (Loss) 335,367 545,722 Net Shareholders Equity 8,758,919 12,802,636 Total Liabilities and Shareholders Equity 15,002,930 19,521,644 Amounts are in JD. JD1=USD1.41
Insurance Commission of Jordan / the Eleventh Annual Report_2011 107 Table (2-3-6): Income Statement for Companies Administrating Insurance Business for the Year Ending 31st of Dec. 2011
2010 2011 Revenues of Operations Internal Revenues 5,840,035 6,718,261 External Revenues 47,099 0 Net Revenues (Operating Activities) 5,887,134 6,718,261 Subtract: Cost of Services 430,225 1,052,421 Gross Profit from Operations 5,456,909 5,665,840 Expenses General and Administrative Expenses 4,821,846 4,665,174 Finance Expenses 241 395 Depreciations and Provisions 204,954 124,396 Total Expenses 5,027,041 4,789,965 Net Profit from Operations 429,868 875,875 Interests and Bank Commissions 4,170 1,862 Loss on disposal of Property and Equipment -9,581 -492 Other Expenses 10,440 29,335 Net Profit from Operations after Interest 424,839 845,170
Other Revenues 203,993 189,717 Total Revenues 6,091,127 6,907,978
Net Profit before Tax 628,832 1,034,887
Loss on impairment of available for sale financial 391,022 0 assets Income Tax Provision 183,474 169,199 Statutory Reserve 4,838 7,556 Contingent Liabilities Provision 4,852 0 Education and Vocational Training Fund 216 0 Net Profit after Tax 44,430 858,132 Add: Other Comprehensive Income Items Accumulative Change in Fair Value 128,022 0 Total Comprehensive Income (Year’s Profit after 172,452 858,132 Tax) Amount in JD. JD 1= USD 1.41.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 108
Chapter Three
Financial Statements of Insurance Commission for 2011
Insurance Commission of Jordan / the Eleventh Annual Report_2011 109
First: Report of Independent Auditor
AM/ 99-8
To the Chairman and Members of the Board of Directors
Insurance Commission
(Established according to Insurance Regulatory Act)
Amman – The Hashemite Kingdom of Jordan
Introduction
We have audited the accompanying financial statements of the Insurance Commission (established according to Insurance Regulatory Act), which comprise the statement of financial position as of December 31, 2011, and the statements of revenues and expenses and comprehensive income, changes in reserve and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 110 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Commission’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Commission’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Insurance Commission as of December 31, 2011, its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.
The accompanying financial statements are a translation of the original financial statements which are in the Arabic language and to which reference should be made.
Amman ‐ Jordan
September 2, 2012 Deloitte & Touche (M.E.) – Jordan
Insurance Commission of Jordan / the Eleventh Annual Report_2011 111
Second: Financial Statements for the Year Ending 31st of December 2011
INSURANCE COMMISSION STATEMENT OF FINANCIAL POSITION December 31,
2011 2010 ASSETS JD JD Current Assets: Cash at banks 643,641 126,817 Accounts receivable and cheques under collection 217,964 207,914 Other debit balances 50,809 54,189 Total Current Assets 912,414 388,920
Non - Current Assets: Property and equipment - Net 2,483,001 2,545,602 Intangible assets - Net 72,095 104,014 Projects in progress 159,271 147,282 Total Non - Current Assets 2,714,367 2,796,898 TOTAL ASSETS 3,626,781 3,185,818 Provident Fund Assets 513,105 443,607
LIABILITIES AND RESERVE Liabilities: Accounts payable 3,909 12,811 Unearned revenue 61,732 88,085 Other credit balances 146,194 244,847 Total Liabilities 211,835 345,743 Reserve: Reserve 3,414,946 2,840,075 TOTAL LIABILITIES AND RESERVE 3,626,781 3,185,818 Provident Fund Liabilities 513,105 443,607
Insurance Commission of Jordan / the Eleventh Annual Report_2011 112
INSURANCE COMMISSION STATEMENT OF REVENUES AND EXPENSES AND COMPREHENSIVE INCOME For the Year Ended December 31, 2011 2010 JD JD
Revenues: Annual fee 2,720,494 2,485,385 Fines on insurance companies 52,500 308,750 Services charges 89,292 87,291 Other revenues 64,518 29,276 Total Revenues 2,926,804 2,910,702 Expenses: General and administrative expenses 2,091,332 2,440,383 Projects and programs expenses 216,623 189,179 Loss on disposal of property and equipment 801 360 Total Expenses 2,308,756 2,629,922 Increase of Revenues over Expenses for the Year 618,048 280,780 Comprehensive Income for the Year 618,048 280,780
Insurance Commission of Jordan / the Eleventh Annual Report_2011 113 INSURANCE COMMISSION STATEMENT OF CHANGES IN RESERVE Reserve JD For the Year Ended December 31, 2011 Balance - beginning of the year 2,840,075 Comprehensive income 618,048 Transferred financial surplus (43,177) Balance - Ending of the Year 3,414,946
For the Year Ended December 31, 2010 Balance - beginning of the year 2,559,295 Comprehensive income 280,780 Balance - Ending of the Year 2,840,075
Insurance Commission of Jordan / the Eleventh Annual Report_2011 114 INSURANCE COMMISSION STATEMENT OF CASH FLOWS For the Year Ended December 31, 2011 2010 JD JD CASH FLOWS FROM OPERATING ACTIVITIES: Increase of revenues over expenses for the year 618,048 280,780
Adjustments: Depreciation of property and equipment 70,623 75,911 Amortization of intangible assets 31,919 22,887 Amortization of unearned revenue (26,353) (17,328) Loss on disposal of property and equipment 801 360 Cash Flows from Operating Activities before Change in Working 695,038 362,610 Capital Items (Increase) decrease in accounts receivable and cheques under (10,050) 144,267 collection Decrease (increase) in other debit balances 3,380 (17,757) (Decrease) in accounts payable (8,902) (345,277) (Decrease) in other credit balances (98,653) (28,345) Net Cash Flows from Operating Activities 580,813 115,498
CASH FLOWS FROM INVESTING ACTIVITIES: Projects in progress (11,989) - (Purchase) of property and equipment (8,823) (30,189) (Purchase) of intangible assets - (149) Net Cash Flows (used in) Investing Activities (20,812) (30,338) CASH FLOWS FROM FINANCING ACTIVITIES: Transferred financial surplus (43,177) - Net Cash Flows (used in) Financing Activities (43,177) - Net Increase in Cash 516,824 85,160 Cash at banks - beginning of the year 126,817 41,657 Cash at Banks - End of the Year 643,641 126,817
Insurance Commission of Jordan / the Eleventh Annual Report_2011 115
Chapter Four
Motor Accidents Compensation Fund
4
Insurance Commission of Jordan / the Eleventh Annual Report_2011 116 The Executive Committee of
Motor Accidents Compensation Fund
Chairperson
Ms. Naljan Hakuz
Insurance Commission1
Members
Dr. Ali Al-Wazani Mr. Khaled Bdeir First Insurance Co. Arab Life & Accident Insurance Co.
1 Occupied this office as from 1st May,2011 in succession of former Chairperson Mr. Ra’ed Haddadin/IC
Insurance Commission of Jordan / the Eleventh Annual Report_2011 117
First: Introduction
Insurance Commission (IC) created the Motor Accidents Compensation Fund in order to provide social protection for citizens by providing injured parties of motor accidents with relevant compensation in a timely manner and help mitigate the negative impacts of such accidents. The Fund provides aid and assistance in cases where those injured do not have access to indemnity for reasons beyond their control.
In 2011, the Fund continued its operations and received claims from motor accidents’ injured parties whether the responsible party was unknown (Anonymous claims) or did not hold compulsory Motor insurance policy. The Fund settled all claims that fulfilled all required documents and data.
Since the inception of the Fund in 2004 till the end of 2011, the fund settled (284) claims and total indemnities paid mounted to JD (1,531,360) - one million five hundred thirty one thousand and three hundred sixty Jordanian Dinars during said period.
Second: Cases and Coverage Provided by the Fund
The Fund accomplishes the above objectives by indemnifying motor accidents' injured parties in cases of death, permanent total disability, permanent partial disability, and moral damages resulting from any of them, temporary disability, and medical expenses in the following two cases:
1. Absence of valid compulsory motor insurance policy for the vehicle causing the accident (Uninsured Vehicle).
2. Inability to indentify the identity of the vehicle causing the accident, or the identity of the owner or driver of the vehicle (Hit and Run).
Cases and amount of indemnity provided by the Fund are the same as those provided for in the Compulsory Motor Insurance Regulation in force and instructions issued in compliance therewith as illustrated in the following table:-
Nature of Damage Limits of the Indemnity
1. Death JD 17000 per person payable to the legal heirs 2. Permanent Total Disability JD 17000 per person
Insurance Commission of Jordan / the Eleventh Annual Report_2011 118 Nature of Damage Limits of the Indemnity JD 17000 multiplied by disability percentage per 3. Permanent Partial Disability person JD 100 per week for a maximum of 39 weeks per 4. Temporary Disability person 5. Moral harm resulting from JD 3000 per person payable to the legal heirs up to the death second degree kinship 6. Moral harm resulting from JD 3000 per person permanent total disability 7. Moral harm resulting from JD 3000 multiplied by the disability percentage per permanent partial disability person 8. Expenses of Medical JD 7500 maximum limit per person Treatment
Third: Damages not Covered by the Fund
In accordance with the Fund’s instructions, the Fund does not indemnify the injured parties of motor accidents in the following cases:
1. If the accident falls under one of the exclusions stated in the Compulsory Motor Insurance Regulation in force.
2. Damages sustained by the driver or the owner of the vehicle causing the accident.
3. Damages to property.
Fourth: Administrative Framework
The Fund was established by virtue of Instructions of the Fund to Remunerate the Injured Parties from Motor Accidents No. (6) of 2004 and amendments thereof, which was issued pursuant to the provisions of Article (85) of the Insurance Regulatory Act No. (33) of 1999 and its amendments. Accordingly, the fund is managed by an Executive Committee consisting of three members appointed by the Director General of the Insurance Commission. Chairperson of the Committee shall be an IC employee and the other two members shall be practitioners in the insurance sector. Membership of the committee shall be two years renewable to a similar
Insurance Commission of Jordan / the Eleventh Annual Report_2011 119 During the period from 1st of January 2011 till 10th of May, 2011, the Fund was managed by the following Committee:
1. Mr. Ra’ed Haddadin/ Deputy Director General of IC/Chairperson
2. Dr. Ali Al-Wazani/ Director General of “First Insurance Company”/ member of the Committee.
3. Mr. Khaled Bdeir/ Manager of Motor Department at Arab Life and Accident Insurance Co.
The Executive Committee was reformed on 11th of May 2011, and accordingly, the Fund was managed during the period from 11th of May 2011 till 31st of December 2011 by the following Committee:
1. Ms. Naljan Hakuz/ Director of Research & Strategic planning Department at IC/Chairperson
2. Dr. Ali Al-Wazani/ Director General of “First Insurance Company”/ member of the Committee.
3. Mr. Khaled Bdeir/ Manager of Motor Department at Arab Life and Accident Insurance Co.
Mrs. Ruwaida Al-Jazazieh- Settlement Administrator at the Inquiry and Insurance Dispute Resolution Department/IC is the Secretary to the Fund Committee; Mrs. Wafa Jiries- Legal Researcher at the Legal Affairs Department/IC is a supporting officer to the Fund Committee. Mr. Omar Abu Hijleh- an internal auditor at the Internal Audit Unit/IC was the accountant of the Fund till 14th of Nov., 2011. Ms. Wafa Khalileh- Accountant at the Administrative and Financial Affairs Department/IC succeeded Mr. Abu Hijleh in this post as from 14th of Nov., 2011.
The Fund subcontracted the function of Auditing the work and accounts of the Fund to KPMG till 31st of May, 2011, Mrs. Haya Al-Abed/Head of the Internal Audit Unit/IC was appointed as the financial auditor of the Fund’s operations starting from 9th of August, 2011.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 120
Fifth: Technical Framework of the Fund
1. Quarterly Financial Reports of the Fund
The Fund's Executive committee prepared quarterly financial reports and a brief on the Fund’s functions and submitted it to IC to review progress of the Fund’s operation. These reports include statements that compare aggregate contributions collected from insurance companies, while others compare revenues from interests earned on fund’s deposits; a third set of statements compares administrative expenditure and indemnities paid during these quarters, all of which are compared with those of 2010. In addition, these reports included a statement of Fund’s balances at banks during the periods covered by said reports. 2. Estimated Budget of the Motor Accidents Compensation Fund
The Executive Committee of the Fund submitted its draft budget for 2012 to IC. This budget included forecasted revenues, current expenditures, capital expenditures, pending claims, and incurred but not reported claims (IBNR), in addition to clarifications to this budget. Indemnities paid are expected to increase as the motor accidents' injured parties have become more aware of the Fund and the coverage it provides. On the other hand, indemnities recovered are expected to increase due to recoursing against the driver and owner of the vehicle causing the damage. Other amounts have been allocated for the purpose of automating the Fund’s operations and implementing a campaign to raise awareness of the Fund and its objectives. 3. Undertaking the Required Procedures to Recourse against Driver and Owner of Vehicle Causing the Accident
The Fund continued to file lawsuits and undertake all legal procedures to recourse against owner and driver of vehicle causing the accident for the cases indemnified by the Fund. The Fund shall not be deemed as an alternative for compulsory motor insurance, as after paying the indemnity to the injured, the Fund recourses for these amounts against the driver and owner of the vehicle causing the accident.
Court awards have been rendered to confirm the right of Fund to recourse against the owner and driver of the vehicle causing the accident up to the limit of the
Insurance Commission of Jordan / the Eleventh Annual Report_2011 121 paid indemnities to the injured. Procedures to execute court awards which gained final degree are in process.
Sixth: Financial Framework
1. Revenues of the Fund
Revenues of the Fund consist of the following sources:
1. A rate of 1% of total compulsory motor insurance gross premiums collected from insurance companies. Collecting contributions of the insurance companies to the Motor Accident Compensation Fund decision No. (14) of 2004 identifies the insurance premiums for which the above percentage is collected; dates of collection and depositing them.
2. Aid, donations, and grants made to the Fund, endorsed by the Board of Directors of IC, and approved by the Council of Ministers if they come from a non- Jordanian source.
3. Revenues generated from investing the Fund’s assets.
4. Any other revenues approved by IC's Board of Directors based on a recommendation by Director General which is based on a recommendation by the Executive Committee of the Fund.
2. Reserves of the Fund
Due to the commitments of the Fund, Article No. (6) of Instructions of the Fund to Remunerate the Injured Parties from Motor Accidents No. (6) of 2004 and amendments thereof stated that the Fund shall maintain a reserve that is equal to its gross expenditure for the previous three years including the expenditure allocated for the claims under settlement and incurred but not reported claims. However, amounts in excess of these shall be remitted to the insurance companies prorated on each contribution for the previous three years. Otherwise, it shall be recognized as a credit balance for the company, if the company so desire.
In 2011, the Fund remitted the excessive amounts to the insurance companies prorated on each contribution for the past three years. The amounts remitted included the share of each company during the past three years in addition to the return from investing of the Fund’s assets. Total amounts transferred to insurance companies in 2010 reached JD (383,589) - three hundred eighty three thousand and five hundred eighty nine Jordanian Dinars-; showing 33% increase over amounts remitted in 2010.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 122
Seventh: Claims Received by the Fund
In 2011, the Fund received (71) claims out of which (35) claims were settled in the same year. Indemnity was paid for (30) claims and (5) claims were declined as they did not fulfill the requirements as per Instructions of the Fund to Remunerate the Injured Parties from Motor Accidents No. (6) of 2004 and amendments thereof.
In 2011, the Fund settled (16) claims submitted in 2010; (8) claims submitted in 2009; (3) claims in 2008; and (1) claim in 2007. It is worth mentioning that the reason for not settling some claims received by the fund and that these are still outstanding is attributed to failure to fulfill the required documents and data supporting these claims or final criminal court order has not been issued by the competent court to confirm responsibility of the driver and owner of vehicle causing damage in claims where the perpetrator of accident is known.
Total indemnities paid by the Fund in 2011 reached JD (605,571) - six hundred five thousand and five hundred seventy one Jordanian Dinars-, compared to total indemnities paid in 2010 of JD (204,932) -two hundred four thousand and nine hundred thirty two Jordanian Dinars-.
This significant increase in the indemnities paid in 2011 can be attributed for several reasons; mainly: 1. The number of claims submitted in 2011 increased due to the increased awareness among motor accidents injured parties of the Fund and types of coverage it provides. These claims counted for (71) in 2011 with an increase of 34% compared with 2010.
2. A large part of claims under settlement fulfilled the requirements and documents especially with regard to the criminal court order due to general amnesty related to these claims and, consequently, payment of indemnity.
3. Amendments and increases in the indemnity amounts provided by the Fund due to amending the Compulsory Motor Insurance Regulation which came into force as from 2nd of May 2010. About 65% of indemnities paid in 2011 were settled in line with the amended coverage compared to 10% of indemnities paid in 2010.
Figure No. (1) Illustrates the number of claims received by the Fund during 2005-2011, number of claims with an “unknown” perpetrator of the accident(Hit and Run), and the claims where the perpetrator is not insured (Uninsured Vehicle)..
Figure No. (2) Shows amounts of indemnities paid by the Fund during 2005- 2011.
Insurance Commission of Jordan / the Eleventh Annual Report_2011 123 Figure (3) provides a breakdown of indemnities paid by the Fund in 2010 and 2011.
Figure (4-1): Claims Received by the Fund in (2005-2011)
71 70 60 60 53 50 40
40 35 30 32 31 27 30 25 25 21 19 Number of claims of Number 20 15 14 11 12 11 11 10 5 6
0 2005 2006 2007 2008 2009 2010 2011 Year Numbe r of Claims (Hit & Rum) Number of Claims (Uninsured Vehicle)
Total Number of Claims Received
Insurance Commission of Jordan / the Eleventh Annual Report_2011 124
Figure (4-2): Indemnities Paid by the Fund in 2005-2011
) 700 606 600
500
400 287
300 205 181 200 133 92 100 28 Indemnities Paid (Thousand JD (Thousand Paid Indemnities - 2005 2006 2007 2008 2009 2010 2011 Year
Figure (4-3): Details of Indemnities Paid by the Fund in 2010-2011
700 606
600
500
400 308 JD) 300 205
200 93 73 78 61 53 45 53 100 23 23 Indemnities Paid (Thousand (Thousand Paid Indemnities 0 2010 2011 Year
Death Disability Moral Damages Temporary Disability Medical Expenses Total
Insurance Commission of Jordan / the Eleventh Annual Report_2011 125
Table of Insurance Companies; Contact Information, addresses, Branches
Telephone Postal No. Company Branches Address Fax P.O.Box Website E-mail No. Code Jordan Insurance The Interior 5689266 5689510 1990 11118 http://www.joif.org [email protected] Federation Circle 1 Arab Union International None Shmeisani 5686820 5684085 7241 11118 www.auiic.com [email protected] Insurance Co. 2 Holy Land Insurance Jebal Al- 3 5668598 5681973 9130 11191 www.holylandinsurance.com [email protected] Company Hussein 3 Jordan International 1 Sixth Circle 5901150 4643805 3253 11181 www.jiig.com [email protected] Insurance Co. 4 Jordan Emirates Insurance 6 Shmeisani 5681444 5680599 925383 11190 www.oasis-ins.com [email protected] Co. 5 Jordan French Insurance 4 Shmeisani 5600200 5600210 3272 11181 www.jofico.com [email protected] Co. 6 American Life Insurance None Fourth Circle 5931007 5930049 1307 11181 www.alico.com [email protected] Co. 7 First Insurance Co. 4 Dabouq 5777555 5777550 189 11822 www.firstinsurance.jo [email protected] 8 Al Barakah Takaful 1 Abdoun 5932359 5932369 831038 11183 www.b-takaful.com [email protected] Insurance Company 9 Jordan Insurance Company 9 Third Circle 4634161 4637905 279 11118 www.jicjo.com [email protected] 10 Wasfi Tell Islamic Insurance Company 8 5620151 5621414 941000 11194 www.islamic-insurance-jo.com [email protected] Street Prince General Arabia Insurance 11 1 Mohammad 4644334 4659602 20031 11118 www.generalarabia.com [email protected] Company Street 12 The National Insurance 2 Shmeisani 5681979 5684900 6156 11118 www.nationalahlia.com [email protected] Company 13 Middle East Insurance 9 Shmeisani 5527100 5527801 1802 11118 www.meico.com.jo [email protected] Company
Insurance Commission of Jordan / the Eleventh Annual Report_2011 126 Telephone Postal No. Company Branches Address Fax P.O.Box Website E-mail No. Code 14 Arab Orient Insurance 7 Abdali 5654550 5654551 213590 11121 www.araborient.com [email protected] Company 15 The Arab Assurers Queen Rania 6 5100081 5100082 926269 11110 www.arabassurers.jo [email protected] Company Street 16 Arab Life and Accident 4 Shmeisani 5693180 5693188 925250 11110 [email protected] Insurance Company 17 Arab German Insurance 2 Shmeisani 5200000 5200025 212640 11121 www.agi.com.jo [email protected] Company 18 Jerusalem Insurance None Shmeisani 5693161 5692577 20094 11118 www.jerco.com [email protected] Company 19 The United Insurance King Hussein None 4648513 4629417 7521 11118 www.united.com.jo [email protected] Company Street Mediterranean and Gulf 20 Insurance Company None Wadi Saqra 5633000 5633011 17717 1195 www.medgulf.com [email protected] (MedGulf) 21 Arab Jordanian Insurance None Wadi Saqra 5666219 5669664 840657 11184 www.ajig.com [email protected] Group Company 22 Euro Arab Insurance Group 4 Rabiyah 5518935 5518956 1435 11953 www.euroarabins.com [email protected] Co. 23 Al-Manara Insurance 4 Shmeisani 5656012 5658482 1912 11118 [email protected] Company 24 Al Nisr Al-Arabi Insurance 5 Abdali 5685171 5685890 9194 11191 www.al-nisr.com [email protected] Company 25 Yarmouk Insurance None Rabiyah 5534527 5534459 182022 11118 www.yarmouk.com.jo [email protected] Company 26 Gerasa Insurance Company None Third Circle 5521144 5511514 840915 11184 [email protected] 27 Delta Insurance Company 2 Jebal Amman 4640008 4654631 3055 11181 www.delta-ins.com [email protected] 28 Philadelphia Insurance Jebal Al- 5 5668131 5693945 8663 11121 www.phicojo.com [email protected] Company Hussein
Insurance Commission of Jordan / the Eleventh Annual Report_2011 127