Africa News - Egypt: Regulators loosen bancassurance rules
Source: Middle East Insurance Review | May 2016
The Egyptian Financial Supervisory Authority (EFSA) and the central bank have relaxed rules to allow banks to have more tie-ups with insurance companies.
The revised rules allow a bank to form an arrangement with one general insurer, one life insurer, one general takaful operator and one family takaful company, reported Al Mal News. Previously, a bank was allowed to tie up with one general insurer and one life insurer. The old rules did not differentiate between conventional insurers and takaful operators.
A moratorium on new bancassurance relationships was imposed in 2008 because of problems over mis-selling and lack of training for bancassurance staff. It was lifted in 2013.
The life insurance sector posted premiums of EGP11.7 billion (US$1.3 billion) from January to December last year, surging by 42% over 2014 which some observers attribute to bancassurance. Despite this, several life insurers said that business growth has not been as fast as expected because of the protracted process involved in nailing down bancassurance partnerships.
Mr Hesham Abd El Shakour, Managing Director of Egyptian Life Takaful Company, said that challenges lay in the length of negotiations with banks and the waiting time for the central bank to approve bancassurance agreements.
Mr Ahmed Salah, Director of Marketing at Delta Life Assurance said that negotiations with banks centre on fees payable to banks and the capabilities of insurance companies to provide the required services to bank customers in all branches rather than in a limited number of them.
EGP1 = US$0.11