Egypt: Proposals raised for Nat CAT insurance pool
Source: Middle East Insurance Review | Nov 2023
A senior insurance executive has proposed a minimum price for natural disaster insurance so that the price of the basic insurance policy, to which Nat CAT cover is attached, would remain unaffected.
Wethaq Takaful Insurance assistant managing director Jamal Shaibah has proposed conditions for insurance plans to be issued by an insurance pool against natural risks.
On the sidelines of the Sharm El Sheikh Rendezvous earlier this month, Mr Shaibah said that disaster insurance coverage would be provided as riders to other insurance policies and that the ceiling on such coverage should not exceed 50% of the sum insured in the underlying policy.
He said that if the Egyptian insurance market did not take the initiative to set the conditions for disaster pool insurance, reinsurers would put in place controls that might have a more severe impact on the insurance market.
About a year ago, Wethaq Takaful Insurance managing director a member of the board of the Insurance Federation of Egypt (IFE) Adel Fatoury revived deliberations on a natural disaster insurance pool when he submitted a working paper on the issue. The IFE has formed a committee to study the establishment of the pool.
Mr Shaibah said that the 1992 Cairo earthquake in Egypt, which resulted in 560 fatalities and injured around 12,400 people was the turning point in natural disaster insurance (covering earthquakes, floods, floods, and storms) in the country because there was not much demand for such coverage before the event.
At that time, disaster insurance was sold as a rider to fire insurance policies at an additional premium independent of fire insurance prices with the coverage amounting to a percentage of the sum assured in fire insurance policies.
With time and due to competition in the Egyptian insurance market, subscription to natural disaster insurance became available without an additional premium and sometimes without limits and for the full insured sum as well. M