Egypt: Loan-linked insurance drives 45% premium growth to $1.7 bln
Source: Middle East Insurance Review | Oct 2017
Premiums in the Egyptian insurance market grew by a historic rate exceeding 45% to EGP29.5 billion (US$1.7 billion) in the fiscal year ended June 2017, compared with EGP20.3 billion in the previous fiscal year.
Life insurers took the largest share of the premiums with a total of EGP19.9 billion, while non-life insurers accounted for premiums of EGP9.7 billion, reported Al Mal News, citing official monthly statistics issued by the Egyptian Financial Supervisory Authority.
Claims paid in the insurance market rose by EGP1.2 billion to EGP10.5 billion for FY2017, compared with EGP9.3 billion in the previous fiscal year. The share of property insurers in the compensation bill stood at EGP4.7 billion, while claims paid by life insurers amounted to EGP5.8 billion in FY2017.
Mr Salah Abdel Fattah, Managing Director of Misr Emirates Takaful Life Insurance, said the growth in activity was due to the high volume of personal loans granted by banks. A condition of the loans is for borrowers to purchase life insurance cover for the term of the loan.
Mr Adel Fatoury, Wethaq Takaful Insurance’s Managing Director, attributed the increase in non-life premiums to several reasons. The first is the liberalisation of the exchange rate last November which led the insured to revalue their assets and increase the sum covered, which was reflected in the increase in premiums. The Egyptian pound lost about 50% of its value against the US dollar following the move to float the local currency.
The second reason is the increase in the number of cars in the country, leading to growth in supplementary motor insurance. Banks require customers wishing to obtain car loans to buy comprehensive motor insurance covering the auto loan repayment period. M
EGP1 = US$0.06