Structure:

  The Egyptian Insurance Market is composed of:

• The Supreme Council of Insurance.

• The Egyptian Insurance Supervisory Authority (EISA).

• Insurance Holding Company.

• 19 direct insurance companies, six of which transacting Life & Non-Life insurance, seven transacting Non- Life insurance , five transacting Life assurance and only one transacting export credit insurance.

• The Egyptian Reinsurance company as the sole specialized reinsurance company.

• One Co-operative Insurance Society

• 628 Private Insurance Funds.

• 3 Governmental Insurance Funds.

• 4 Pools.

  • Central Cargo Railways and Cotton Transportation Pool.

  • Nuclear Pool.

  • Decennial Liability Pool.

  • Highways, Railways and Underground Metro incidents Pool.

• Insurance Federation of Egypt.

• Cargo Supervision & Surveying Office of Egypt.

• Insurance Studies Institute.

Market performance as at 30/6/2006

 

In the year under review the Egyptian Insurance Market witnessed growth in different areas which can be illustrated by the following figures:

• Gross premium income increased to L.E 4850 million compared to L.E 4519 million in the previous year with a growth rate of 7.3%.  

• Life insurance premiums increased to L.E 1788 million compared to L.E 1522 million in the previous year with a growth rate of 17.5%.

• Non–life insurance premiums increased to L.E 3062 million compared to L.E 2997 million in the previous year with a growth rate of 2.2%.

• Total claims paid increased to L.E 3618 million compared to L.E 2489 million in the previous year with a growth rate of 45.4%.

• Life insurance claims increased to L.E 1161 million compared to L.E 763 million in the previous year with a growth rate of 52.2%.

• Non–life insurance claims increased to L.E 2457 million compared to L.E 1726 million in the previous year with a growth rate of 42.4%.

• Net investments increased to L.E 18695 million compared to L.E 16813 million in the previous year with a growth rate of 11.2%.

• Net investment income increased to L.E 2749 million compared to L.E 1868 million in the previous year with a growth rate of 47.2%.

• Policyholders' rights reached L.E 14295 million compared to L.E 12651 million in the previous year with a growth rate of 13.0%.

• Shareholders' equity reached L.E 4052 million compared to L.E 3750 million in the previous year with a growth rate of 8.1%.

  Read more…

Regulatory Environment:

The insurance industry in Egypt is regulated by the Egyptian Insurance Supervisory Authority (EISA) through The Insurance Supervision and Control in Egypt Act No. 10 of 1981 as amended by Act No. 91 of 1995 . The amendments to the original Act came about as a direct result of the GATS to allow foreign capital in Egyptian Insurance companies up to a maximum of 49% and at the same time partly relaxed the rules governing insurance company investments. The Act empowers the EISA to regulate the insurance market, but at the same time provides scope for the state-owned companies to compete with the new private owned companies.

To further stimulate private-sector development in Egypt and to attract international management skills and techniques, the government passed Act No. 156 in 1998 which fully opened the insurance sector to foreign competition. The Act allows foreign capital up to 100% of the equity in an insurance company and also for foreigners to take all the seats on an insurance company’s board of directors. The Act also requires any individual or institution that wants to take a stake of between 5% and 10% in insurance company to notify the EISA of its intent. In addition, the acquisition of a shareholding above 10% requires prior approval from the EISA and the Prime Minister. (for more information please visit EISA website as shown below).

Recent Developments:

2006 was indeed an interesting and fulfilling year in terms of the number of projects. The most  important projects represented as follows.

* Consortium of international consultants:

 Perhaps the most strategic development to the Egyptian insurance market was the "Restructuring & Privatization" project ventured into in collaboration with a consortium of international consultants (BNP Paribas, Milliman, Earnest & Young, Baker & Mckinsey & CIB) and in cooperation with the Egyptian Ministry of Investment. The projects entails a thorough study of the operational, financial, actuarial and legal aspects of the Egyptian insurance companies. While the project is still in progress, it has already enabled us to further identify our strengths and weaknesses and put clearer targets for the coming 3 years.

* Issuing the law of establishment of Insurance Holding Company:

Another major project that was given much attention was a Presidential Decree No. 246/2006 that was issued to establish the Insurance Holding Company (IHC) which is responsible for overlooking the operations of the 4 Egyptian state-owned (re)insurance companies with the following aims:

• Facilitate the technical and financial restructuring and managing the State-owned Insurance Companies.

• Facilitate establishing subsidiaries which are necessary for growth and promoting performance.

• Preserving all the employees’ rights.

• Focus on EISA supervisory role and enhance it.

* Reducing the Stamp Duty:

As a result of the joint efforts between the Ministry of Finance and the Ministry of Investment, law 143 /2006 has been issued concerning reducing the stamp Duty on insurance branches as follows:

• One percent for every life insurance premium, or illness insurance, or bodily injuries or any related liabilities. Also, on any compulsory insurance premiums.

• Ten percent for inland, river, marine and aviation insurance premiums with a minimum charge of one Egyptian pound.

• Ten percent for each premium of the other insurance premiums including war insurance with a minimum charge of one Egyptian pound.

• 0.8% on insurance premiums that are collected by the insurance companies on a yearly basis.