Egypt: Insurers urged to design prototype products to address the lack of data
Source: Middle East Insurance Review | Dec 2023
The lack of historical data that would form the basis to price microinsurance products is a hurdle which insurers can overcome by adopting prototype products at an initial price, according to the Insurance Federation of Egypt (IFE) microinsurance and small and medium enterprises insurance committee chairman Makeen Lotfy Abdullah.
The performance of the prototype products can be monitored for a period of three to six months during which customers’ views can be solicited and the loss ratio on such products calculated to shape the eventual terms and conditions of the microinsurance policies, he said. He was speaking at a workshop organised by the IFE and African Reinsurance Corporation (Africa Re).
Other speakers at the workshop raised several proposals to expand microinsurance in Egypt.
IFE microinsurance and small and medium enterprises insurance committee vice chairman Hadil Abdelkader said that the design of microinsurance products must reflect the customer’s understanding and awareness of insurance concepts, meet the customer’s needs, allow the target customer ease of access to microinsurance, ensure the policies are priced appropriately for the customer who has limited income, and take into account the cost of coverage appropriate to the income of the target group.
She said some solutions that could help in educating insurance companies about the target market. These include educating those working in the insurance market, the most important of whom are the insurance underwriter and the salesperson. This includes tapping companies that have a large customer base, such as mobile network operators and online stores.
Another speaker, Africa Re regional director Gamal Sakr said that the persistent insurance gap is attributable to the population in remote areas, low levels of insurance awareness and the use of distribution methods that are behind industry developments. M