AMMAN —
The former director of the Jordanian Federation of
Insurance Companies, Maher
Al-Hussein, said that four insurance companies have been liquidated recently,
citing compulsory insurance of vehicles as the main reason for companies’
losses, according to Al-Mamlaka TV.
اضافة اعلان
Hussein said on Monday that the four companies are
now legally liquidated, with the announcement published in the
Official Gazette, but those entitled to compensation have not received anything yet.
According to him, the total losses of insurance
companies because of compulsory insurance of vehicles since 2001 until today
exceed JD370 million.
All companies that have gone bankrupt or are
currently suffering, he said, deal in car insurance, which constitutes no less
than 97 percent of their insurance portfolio.
Hussein stressed that between 100,000 and 200,000
people are directly or indirectly affected by the bankruptcy of an insurance
company.
He said that the criterion used to measure an
insurance company’s ability to meet its obligations is the so-called solvency
margin standard, which should be equal to 150 percent of its obligations. He
added that there are insurance companies that have a solvency margin of less
than 150 percent, and even less than 100 percent.
“If the central bank wants to objectively apply the
solvency margin, the number of troubled companies will increase,” Hussein said.
“Insurance companies lose a huge amount by
underwriting compulsory insurance on vehicles,” he added.
He indicated that insurance premiums had increased
by 100 percent since 2001, but in contrast, the underwriting has increased by
no less than 600 percent, noting that accident rates constitute 6 percent of
liabilities undertaken by these companies.
“The value of the premium paid by citizens on compulsory
insurance is not at all commensurate with the size of the obligations incurred
by insurance companies,” Hussein said.
He added that “major companies that have a local,
Arab, and global presence have many other insurance products that ensure profitability,
but such profits turn into losses because of compulsory insurance”.
Read more Business
Jordan News
.jpg)
.jpg)
