Egypt: Urgent need for disaster insurance pool
Source: Middle East Insurance Review | Jan 2017
The establishment of a natural disaster insurance pool in Egypt needs to be accelerated as the issue has become more urgent following losses from floods affecting a number of governorates in the country, insurance industry players said.
The Insurance Federation of Egypt (IFE) has prepared a study on natural disasters in the country according to the geographic subdivisions. For instance, the study shows that losses in the city of Alexandria due to floods in 2015 are estimated at around EGP500 million (US$27.5 million), reported Bourse News.
Statistical reports prepared by the Fire Insurance Committee of the IFE show that the total number of insurance contracts covering natural risks for 2014-15 was around 23,000, generating total premiums of EGP50 million, whereas claims are estimated at EGP200 million. The total loss ratio is 403%.
In 2015, the IFE rallied insurers in a bid to establish a natural disaster insurance scheme which it had hoped would be set up before the end of 2016. The scheme was to cover risks like earthquakes and floods. However, no news has emerged on this front since.
Mr Ahmed Morsy, Deputy Managing Director of Egyptian Takaful Property and Liability Insurance, and head of the Engineering Insurance Committee of the IFE, said that the lack of a database on claims and other information was delaying the establishment of the pool. He added that insurers were recently informed to report disaster events to the IFE so as to contribute data to help determine the appropriate technical pricing for disaster coverage.
EGP1 = US$0.05