News Middle East28 Oct 2024

Jordan:Mid-sized insurer expected to meet 2025 rule doubling minimum capital to UD$23m

| 28 Oct 2024

Jordan French Insurance Company (JOFICO) is expected to meet higher regulatory requirements that are set to be introduced in 2025, whereby the minimum amount of paid-up capital for composite insurers will rise to JOD16m ($23m) from JOD8m, says Fitch Ratings.

JOFICO is a medium-sized insurer in Jordan, with a moderately competitive position. The company is a composite domestic insurer that maintains a prominent focus on motor and health lines, which accounted for 43% and 48% of its insurance contract revenue, respectively, in 2023.

Fitch views JOFICO’s operating scale as limited, as reflected in gross written premiums of JOD38m in 2023, or $53m based on the average official exchange rate. JOFICO has an adequate franchise in the domestic insurance sector and remains a medium-sized company with a market share of 5.2% in 2023 (2022: 4.5%).

Fitch assesses JOFICO’s risk appetite as being in line with the sector average.

JOFICO’s capitalisation, as measured by Fitch’s Prism Global model, weakened to ‘Somewhat Weak’ at end-2023 from ‘Adequate’ at end-2022 following premium growth of 17%. Its regulatory solvency margin ratio, based on Solvency I, recovered above the minimum of 150% at end-2023.

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