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Egypt Insurance Report Q4 2011
Business Monitor International, Nov 2011, Pages: 70
Business Monitor International's Egypt Insurance Report provides industry professionals and strategists, corporate analysts, insurance associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Egypt's insurance industry.
- It remains to be seen what will be the impact on the sector of the political upheaval.
- Life insurance in particular was growing rapidly before the beginning of 2011.
- Thanks to the general rise of the economy, non-life insurance was also expanding at a respectable rate.
- The sector is well into the second phase of the reform programme mandated by the restructured regulator and the Ministry of Investment. Some clear benefits should be visible when the final figures for the year to June 30 2011 become available.
As of September 2011, it appears that the political unrest that swept Egypt in early 2011 is unlikely to have a lasting impact on the Egyptian insurance sector. Arab Misr Insurance Group (AMIG), the local affiliate of Kuwait’s Gulf Insurance, reported that gross written premiums rose by 7% in the year to June 2011. The company’s profits also increased.
Much of the life segment – as BMI sees it – includes contributions to private insurance funds that are providing basic protection-type products: only in the event of a total economic meltdown, which has not happened in Egypt, would the contributions fall.
Media reports on the budget for Insurance Holding Company, the vehicle through which the government maintains its interest in the recapitalised and restructured Misr Insurance and Misr Life, is looking for growth in premiums, underwriting profits and net earnings in the current (June 2012) year relative to the June 2010 year.
Nevertheless, it is difficult to avoid the conclusion that Egypt’s insurance sector has entered a phase of stagnation. The regulatory regime has been overhauled and Insurance Holding Company has been strengthened financially. However, there is as yet no sign that non-life penetration – a basic measure of development – is increasing. In fact, the opposite has been the case for some time. Given the state of political flux, there does not appear to be any official enthusiasm for radical change at the state-owned titan which accounts for about half of all premiums (and which holds an interesting real estate portfolio).
Trends in life insurance premiums through 2H11 will provide a useful indicator as to Egyptians’ faith in the long-term future of the country following the fall of President Mubarak.
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