ORGANIZATIONAL STRUCTURE AND PERFORMANCE OF THE PROPERTY-CASUALTY INSURANCE INDUSTRY IN JORDAN

This study investigates the effect of organizational structure on firm performance, in the Jordanian property-casualty insurance industry. Jordanian insurance companies take only two organizational forms: conventional stock insurance companies and Islamic mutual insurance companies (Takaful). A total of 28 insurance companies over 9 years period is analyzed using a multi-regression model. In general, the findings show no significant impact. These results are inconsistent with agency theory. The empirical evidence suggests that each structure has its own comparative advantage. During the sample period, there was a backward in the performance of the Jordanian insurance companies, although there are large differences between companies. Premiums growth rate decreased from 12% in 2004 to 7% in 2011, while that of the payment increased from 15% to 22% during the same period. Islamic insurance market share increased significantly from 4.8% in 2003 to 7.9% in 2011, indicating that this form of insurance is gaining a market.