'Only 8% of 1.42m registered cars involved in traffic accidents'

AMMAN — Around 8 per cent of the 1.42 million vehicles registered in the Kingdom are involved in causing traffic accidents each year, according to President of the Jordan Insurance Federation (JIF) Ali Wazani.  

Wazani told The Jordan Times Saturday that the number of cars involved in accidents is around 114,000 on a yearly basis.

On Saturday, the Driver and Motor Vehicle Licensing Department announced that by the end of January this year, the number of registered cars reached 1.42 million.

The JIF president gave the figure on the number of cars causing traffic accidents as he was explaining that floating auto insurance premiums would improve road safety in the Kingdom, revisiting an issue that had arisen periodically over nearly four years. 

He explained that floating the price of compulsory third party liability (TPL) insurance, which is now fixed at JD95, would give insurance providers the right to charge higher rates to motorists who have a record of traffic accidents because they will be considered high-risk drivers, while others with clean records would be given discounted rates. 

This approach would force drivers to improve their behaviour on the road, Wazani said. 

He said floating the TPL price may result in lower premiums as competition between the 24 insurance firms will increase. 

"Historically, the majority of products whose prices were liberalised never got more expensive, but instead got cheaper," Wazani said. 

"The vast majority of motorists in Jordan pay the current fixed premiums in order to pay for the minority involved in accidents," he added. 

The JIF has been demanding liberalisation of prices for over four years and it reached an agreement with the government on full liberalisation of the insurance service in 2013. 

This decision was supposed to go into effect in 2014, but did not because as the Ministry of Industry, Trade and Supply said it was carrying out a study on the changes.

Asked regarding any developments on the study, Wazani said the ministry has promised to give an answer to the federation in the near future, adding that the sector expects a positive outcome of the study. 

Turning to the financial performance of insurance companies, he said the majority of firms are making profit, and the overall net profit of the sector in 2015 is expected to be around JD25 million, down from the JD33 million achieved in 2014. 

There are still few firms that have not announced their financial results so far, Wazani noted, adding that only two or three companies may have faced financial losses last year.