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Egypt: Insurance sector seeks transformation catalyst

Source: Middle East Insurance Review | Jan 2020

Egypt’s insurance industry needs a catalyst which can lead to the transformation of the industry, said local senior industry executives, just as the central bank did in 2004 in restructuring and developing the banking sector.
 
These comments were made at the 6th CEO Conference held in Cairo in early December, according to a report by Al Mal.
 
Mr Mohamed Moustafa Abdelrasoul, managing director of Arab Orient Takaful Insurance expressed the hope that the Insurance Federation of Egypt (IFE) would develop the industry and work to increase insurance awareness, adding that the Federation’s decisions should be made mandatory so that the IFE have some degree of authority over companies in the sector. Currently, the IFE plays a consultative role.
 
Echoing Mr Abdelrasoul’s view, Mr Ahmed Khalifa, managing director and CEO of Sarwa Insurance, stressed the necessity for decisions of the technical committees of the IFE to be binding on insurers because the panels undertake professional tasks that improve market practices.
 
Dr Adel Mounir, secretary general of the Federation of Afro-Asian Insurers & Reinsurers (FAIR) said there are several approaches to take to develop the Egyptian insurance sector such as product design, compensation management, and the use of mobile and digital applications. He suggested that the IFE take up the role of catalyst for the insurance sector, because it is one of the strongest professional federations and it is mandatory for insurers to be members.
 
Mr Basel El Hini, chairman and managing director of Misr Insurance Holding Company (MIHC) said while the role of the Financial Regulatory Authority (FRA) in supervising the insurance sector is good, the industry is awaiting greater and quicker changes along the lines of what took place in the banking sector. He added that it would not be easy to add the role of development catalyst to the functions currently undertaken by the FRA which also oversees other financial services.
 
In addition, he said insurers should move towards change and development by following the lead of government-owned insurers, so as to emulate the success seen in the banking sector.
 
Mr Reda Fathy Ahmed, chairman & managing director of Mohandes Insurance said some customers do not disclose that they have received compensation for losses incurred because they wish to keep the settlements a secret from their creditors. Thus, there is a perception that insurers do not honour claims even though insurers do make payments on humanitarian grounds in cases where the risk is not covered by insurance.
 
He said the proportion of claims not paid in the insurance sector is 3-4%, and that this percentage is used to distort the image of the sector. M 
 
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