Jordan to host Pan–Arab Insurance Conference for 3rd time next year

By Abeer Nouman

DEAD SEA – Jordan will host the Pan–Arab Insurance Conference for the third time on May 17, 2010, the Jordan Insurance Federation (JOIF) announced Monday.

Organisers and sector representatives hope that the activities of the 28th conference will bring about changes to strengthen the sector and raise awareness on the importance of insurance.

During the three-day event, participants will tackle different insurance-related issues and attend workshops to come out with recommendations that can strengthen and propel the growth of the sector.

Speaking at a press conference, JOIF Chairman Jawad Hadid indicated that the contribution of the insurance sector to the gross domestic product (GDP) does not exceed 2.5 per cent, reiterating the need to work out ways to ensure the sector’s sustainability and development.

Budget Department Director General Ismail Zaghloul told The Jordan Times on Tuesday that the insurance sector’s contribution to the GDP, in real terms, was less than 1 per cent in 2006.

Hadid, a former minister of planning, said: “All economic sectors, especially in certain Arab countries, have been directly affected by the economic recession which started by cutting jobs, but the impact on the insurance sector has been less.”

Although the impact of the recession on the insurance sector has been minimal, he indicated that investment portfolios of insurance companies have been affected by the global down turn.

According to Hadid, profits of the insurance sector rank at the bottom of the list of shareholding corporations in the Kingdom.

The regional conference, to be held by the General Arab Insurance Federation (GAIF) in cooperation with JOIF, will seek to develop the Arab insurance industry and address challenges facing the sector, Hadid told the press.

One of the main challenges facing the sector is that most re-insurance funds are remitted overseas multinational firms, leaving a scanty amount for the Arab world, GAIF Secretary General Abdul Khaliq Khalil indicated.

In 2005, insurance premiums were about $13 billion, of which $2.5 billion was the re-insurance figure, but the share of the Arab world was only $270 million, he pointed, noting that the insurance volume in the Arab world is not sufficient.

Established in 1964, GAIF’s main goal is to improve and encourage communication among the insurance sectors in the different Arab contries, and develop the insurance industry, in general.

Jamal Awamleh, the deputy chairman of GAIF, who is also the general manager of the Arab Union International Insurance Company, said hurdles facing the development of sector in Jordan are related to education and awareness issues as well as citizens’ incomes.

“Fronting, a controversial insurance practice, which causes the largest portions of premiums to go abroad is another hurdle,” he said, adding that the sector is not that strong financially to be able to provide high-risk insurance such as that of aviation companies.

Imad Al Khaleq, the board member of JOIF, also general manager of Jordan Insurance Co. highlighted preparations for the conference which will be under the slogan “Secured Economy … Comprehensive Development”.

Jordan’s insurance sector has 28 companies, Hadid said, noting that the Jordan Insurance Commission has tried to create a climate of mergers, but that has not been successful so far.

Hadid added: “Market forces will prevail and some companies may have to go out of the market due to their rejection of mergers.”

jordantimes