Egypt: Regulator sets agency fees for takaful companies
Source: Middle East Insurance Review | Oct 2019
The Egyptian Financial Regulatory Authority (FRA) has discussed with takaful operators the need to determine the proportion of contributions to be levied as a fee on policyholders by takaful operators operating under the agency system.
The decision reached is to set a 25% fee for life companies and 30% for property companies where the percentage is not previously defined, reported Al Mal.
However, a source revealed that executives of takaful companies object to these percentages because of the significant negative effect on profits. This is especially since administrative expenses exceed 40% currently, going up to even 80% for family takaful, especially in the first year.
The FRA has asked takaful operators to submit their plans for implementing the agency fee ratio in September, and to adopt new conditions fully by the end of next February.
Takaful operators in Egypt include: Egyptian Saudi House, Egyptian Takaful, Wethaq, Tokyo Marine General Takaful, Orient Takaful and Misr Takaful Insurance. M