Blood Money Rise Under New Motor Cover Rules

Motorists involved in fatal crashes across Jordan will under new insurance rules have to pay $28,000 blood money to the victim’s relatives, the Kingdom’s government has ruled. The Cabinet’s new policy for motor third party liability (TPL) insurance, which has risen 67% from nearly $17,000, is also payable to anyone left permanently disabled in a car accident. And the cost of covering medical expenses related to road accidents has increased to $10,500 from some $7,000.

Corporate Governance

Dr Omar Clark Fisher explores the alignment of corporate governance and company performance in relation to takaful companies, while calling for a far more active role for policyholders in the decision-making process.

Jordan Insurer Given Ratings Downgrade

A Jordanian insurance company has suffered a ratings blow after being downgraded by credit agency Standard & Poor’s (S&P). Middle East Insurance Company’s (MEICO) ‘BBB’ classification has been lowered to ‘BBB-’, amid concerns that Jordan’s economy is set for troubled times. On March 12, S&P downgraded the Kingdom’s long-term local currency sovereign credit rating, basing its reassessment on an uncertain trading environment.

Insurance Uptake In GCC “Not Nearly Enough” – Analyst

Insurance uptake in the GCC remains worryingly low, despite a rise in premiums that far outstrips the worldwide growth average for 2009, a global management consultant has claimed. Value Partners revealed on Monday that premiums in the GCC climbed 28% to $10.6bn last year from 2008 – a huge gap compared to the 3.4% global average. But Santino Saguto, managing director of Value Partners’ Dubai office, insisted insurance growth in the GCC was still not nearly enough.

Promoting Growth And Competitiveness

With insurance market growth of 26 per cent between 2005 and 2008, the region’s insurance sector has made significant progress, but it still has room for improvement, according to Peter Vayanos & Roger Kastoun of Booz & Company.

IPO On The Cards For Saudi Insurer

Solidarity Saudi Takaful Company is gearing up for an initial public offering that will see the company issue 22.2 million shares, according to reports citing chairman Prince Khalid Talal bin Abdulaziz Al Saud. The IPO, which is open to subscription from March 22-28, will provide 40% of the company’s authorised capital. Bahrain’s Solidarity Group and Saudi investors that make up the Solidarity Saudi Takaful Company.

AXA Profits Buck Economic Downturn

AXA has revealed a Middle East profit surge for 2009, despite operating in tough economic conditions throughout the year. The company registered a $40 million net income after generating $445 million from gross written premiums, an 8.6% rise compared with 2008. All AXA operations across the GCC reported double-digit growth ranging between 15% and 26%, apart from the UAE, which suffered a slight drop. While business in Abu Dhabi was up 26%, Dubai registered an undisclosed decline. Jean-Louis Laurent Josi, CEO AXA Insurance Gulf and Middle East, attributed the company’s growth to employee and customer satisfaction, market support and a resilient business model.

ADNIC On Firm Financial Footing

Abu Dhabi National Insurance (ANDIC) overcame a difficult opening half in 2009 to deliver healthy profits for the full year. The insurance company’s premiums grew 14.3% to AED1.55bn from AED1.36bn the previous year. Meanwhile, net profit after factoring in full impairments on AED307 million worth of saleable assets was AED52 million. Further product distribution, improved investment and risk management, and customer retention contributed to ADNIC’s solid financial performance, the company said. “We remain focused on achieving our accelerated evolution plan 2010-2012 by maintaining the inertia we consider crucial in realising the aggressive and profitable growth expected through our strategic business plan,” said ADNIC chief executive Walid Sidani.

Reinsurance Round-up

The Middle East and North African markets experienced a softening in prices during the renewals season. The UIB Group provides a review of conditions and highlights from 2009.

Making His Mark

Fareed Lutfi of the Emirates Insurance Association and the GCC Commission for Insurance and Reinsurance Companies.

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