Car insurance proves to be a losing proposition
Providing car insurance is a losing proposition, mid-year results of three local insurance companies recently revealed.
The Arab Life and Accidents Insurance Company, Jerusalem Insurance Company and the United Insurance Company all registered losses in this type of insurance.
While Arab Life and Accidents Insurance Company recorded a loss of nearly JD190,000, Jerusalem Insurance Company's losses stood at JD116,000 — both exceeded losses incurred during the same period of 1999.
Meanwhile, United Insurance Company witnessed a loss of about JD40,000, its balance sheet revealed that the loss was less than the 1999 mid-year figure of JD171,000.
Non-profitability in the car insurance market has been a persistent complaint by local insurance companies.
Last June, managers of Jordanian insurance firms called on the Ministry of Trade and Industry to exempt insurance firms from compulsory insurance and to float the premiums because of the rising number of car accidents.
According to official sources, in 1999, the loss ratio of car accidents reached 85 per cent, with companies paying a total of JD31.6 million in compensation and settlements as a result of car accidents.
The balance sheets of the Jerusalem and the United companies showed that, in terms of profits generated from all types of insurance, overall business was not flourishing in the period.
Jerusalem Co.'s losses stood at around JD18,000 plunging from JD66,000 in its 1999 profits for the same period.
United's profits dropped to JD33,000 from JD57,000 profit recorded in the same period of 1999.
Arab Co. was the exception. Its results revealed that from all types of insurance rose to JD52,000 from JD38,000 recorded in the same period of 1999. ― ( Jordan Times )
By Rana Awwad
© 2000 Mena Report (www.menareport.com)