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Egypt: Call for efforts to develop microinsurance broking

Source: Middle East Insurance Review | Jun 2018

Insurers wishing to provide microinsurance services should encourage intermediaries to engage in microinsurance brokerage activities by offering incentives, said Mr Hassan Abaza, general manager of marketing and business development at Misr Takaful Insurance.
 
   At present, he said microinsurance business volume is too small for specialist microinsurance brokers, but an intermediary could eventually benefit from the theory of large numbers because the more the number of customers there are in the microinsurance arena, the higher the premium volume. Other existing hurdles are that the size of small and micro enterprises is still small, as is the size of the financing granted to the owners of these enterprises, according to a report in Al Mal News.
 
   He also said the taxation authorities as well as the Financial Regulatory Authority should encourage insurers to engage in microinsurance through tax exemptions and incentives, including benefits for intermediaries which will then find the line of business attractive enough.
 
   He stressed that the specialised broker in microinsurance, something which currently does not exist, needs experience in marketing and selling these products. He also suggested that microinsurance could be sold as a group contract through trade unions and professional associations that have many branches throughout the country and with memberships estimated in the thousands. The group microinsurance policy is issued by the insurer and the policy is sent to the main union or association for dissemination to members.
 
   Microinsurance could offer cover against personal accident risks, medical and funeral expenses, and other risks that meet the actual needs of customers.
 
   Mr Mustapha El-Feshawy, head of technical affairs at Egyptian Takaful Insurance said insurers should provide training in the marketing and sale of microinsurance through the Egyptian Insurance Institute and the Financial Services Institute. He also urged that campaigns be organised to increase the level of insurance awareness.
 
   In order to have intermediaries specialised in microinsurance, support too should be provided by banks and associations through the extension of micro-loans at reduced interest rates and with soft conditions, he said. M 
 
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