Euro Arab Insurance Group is expected to continue to expand its business, at 5%-10% per year over 2025-2027, with projected combined ratios of 97%-99% annually, S&P Global Ratings (S&P) said.
In 2024, Euro Arab's insurance revenue increased about 6.4% to JOD48.6m ($67.7m), from JOD45.7m in 2023. The increase mainly resulted from growth in the group's key lines, including motor and medical insurance. Euro Arab maintained strong underwriting performance with a net combined ratio of 96.6% in 2024, slightly improved from 96.7% in 2023.
The company’s shareholders’ equity rose to JOD17.1m at the end of 2024 from JOD13.6m at the end of 2023, as the firm fully retained its earnings. Capital adequacy based on S&P’s model reached the 99.95% benchmark in 2024, with total adjusted capital standing at approximately $28m.
S&P has revised its outlook on Euro Arab to ‘Stable’ from ‘Positive’ while affirming the company’s ’BB-’ insurer financial strength rating.
S&P now views Euro Arab’s capital and earnings as strong, and notes that shareholders plan to inject additional capital in 2025, which could further improve capital adequacy to the 99.99% level.
Cash and bank deposits with local financial institutions continue to dominate the group's investments. In S&P’s view, however, this is a key rating constraint because it exposes the company to material economic and banking sector risks in Jordan. Under S&P’s hypothetical sovereign stress test scenario, Euro Arab would maintain positive regulatory capital but face a shortfall in liquidity.
S&P therefore caps its ratings on the group at the level of the sovereign, Jordan (‘BB’-/’Stable’/’B’).