Success Story
Islamic Finance is based on risk sharing principle in fair and transparent manner. As a system, it encourages the economic activity towards addressing poverty and inequality to ensure social stability. As you know well, the most common sustainable development spectrums that international organizations try to cover and achieve a sustainable development goals such like poverty, health, education, inequality, food security, shelter.. etc
Since Islamic Finance has a unique potential of promoting financial stability and shared prosperity, it creates an effective environment that helps to achieve sustainable development goals. For example, the most known Islamic principle (Zakat), is about donating a sum of money from wealthy people to the poor and needy ones. This principle, for instance is of great value in fighting poverty and achieving a decent living for poor people.
Also, Islamic financial institutions usually assigns an account which is dedicated to social objectives. In addition, some Islamic finance practitioners encourage the principle of endowments (Waqf), the returns on which are dedicated also to charity means and social development projects. Such principles of the Islamic Finance can minimize the severity and frequency of financial crises by introducing the risk sharing discipline.
Islamic Financial Institutions (IFIs) attracted the attention of researchers in all over the world as being a robust and resilient financial system. They proved their efficacy and survived the global financial crisis, and since then the Islamic Finance has emerged on the scene as an integrated economic system.
The Takaful Islamic insurance , for instant, has become a strong competitor to the conventional insurance. Taking the Islamic Insurance Company as an example; particularly in 2008, it achieved a profit rate of 75% of its capital then. knowing that it was the same year that the global financial crises started.
The Islamic Financial Industry has grown considerably spite of the presence of significant macroeconomic and geopolitical hazards. A recent study revealed that the World Islamic finance market is set to reach a$3.25 trillion by 2020, led by banking and Takaful assets1.
Successful story of the Islamic Insurance in Jordan
Islamic Finance is based on risk sharing principle in fair and transparent manner. As a system, it encourages the economic activity towards addressing poverty and inequality to ensure social stability.As you know well, the most common sustainable development spectrumsthat international organizations try to coverand achieve a sustainable development goals such like poverty, health, education, inequality, food security, shelter.. etc
Since Islamic Finance has a unique potential of promoting financial stability and shared prosperity, it creates an effective environment that helps to achieve sustainable development goals. For example, the most known Islamic principle (Zakat), is about donating a sum of money from wealthy people to the poor and needy ones. This principle, for instance is of great value in fighting poverty and achieving a decent living for poor people.
Subsequent to the spectacular success realized by the Jordanian Islamic Bank which is the first Islamic bank in Jordan and established in the year 1978 and realized during its life numerous accomplishments and successes. The establishment of the Islamic joint liability company has become inevitable in order to complete the Islamic economic cycle in Jordan.
Hence, the Islamic Insurance Company emerged through the Jordanian Islamic Bank in 1996 and was the first Islamic Insurance Company to be established in Jordan taking advantage from the promulgation of Law No. 9 of 1995 which enabled the establishment of new insurance companies and the Jordanian Islamic Bank had a long arm in facilitating the establishment and supporting our company by a group of founders who are distinguished by multi commercial, industrial, real estate, professionals and business practitioners, enabling it to set out over a wide base of miscellaneous activities and expertise. In addition to the support of Jordanian Islamic Bank
by insuring its business and activities through the Islamic Insurance Company which made its take off proceed on a sound economic base and surrounded by a great number of experts and scholars. One of the most important basis for the successful launching of any joint liability company is to be launched start and be launched through a main founder whose work scope base is Islamic finance and more importantly be an Islamic bank.
The Islamic Insurance Company started with a capital of two(2) million Jordanian Dinars and began to increase it from the company`s realized profits through the years until reaching now 15 million Jordanian Dinars. It’s worth mentioning that through the twenty years of the company`s age, the founders were not requested to participate in such increase except once in 2005 only.
The Company began with 3000participants (policyholders) and now reached 31000 insured at the end of 2016 .The total Insurance subscriptions were 2,3 million JDs, whereas they reached 32 million JDs at the end on 2016.
The shareholders dividend during the twenty years of the company’s life amounted about 20 million Dinars and the total distribution as an insurance surplus to policy holders amounted to about 4 million Jordanian Dinars, hence the total distributions made during the company`s life amounted about 24 millions Dinars
The Islamic Insurance company dominates the major share of the insurance market in Jordan and occupies a distinct rank in the Islamic insurance market abroad. It was awarded with many prizes and received distinguished rating for the three consecutive year by the Islamic Rating Agency
The Islamic Insurance company has participated in establishing many Islamic insurance companies in Yemen, Lebanon, Tunis and look forward to other countries in north Africa. Notwithstanding its major efforts in establishing the first Islamic Reinsurance Company in Saudi Arabia , Saudi Re, with a capital of 1 billion SR. Since its inception, the Islamic Insurance company has defined its mission, vision and strategic goals and surely achieved them.
The following diagram shows how the Islamic Insurance Company has developed since inception
From the above results through the past 21 years, we note that that Islamic insurance company have achieved its strategic goals and turned them into a sustainable business goals.