Egypt: Implementation of the first actuarial life table to begin in July 2022
Source: Middle East Insurance Review | Oct 2021
The first Egyptian actuarial life table is scheduled to be implemented next July, the first month of the next fiscal year, according to Financial Regulatory Authority (FRA) assistant to the chairman Hesham Ramadan. He is also chairman of the Egyptian committee for the establishment and study of actuarial tables.
Mr Hesham told Amwal Al-Ghad that the actuarial table has been prepared and work will be carried out to prepare the market to use it. Workshops will be conducted to brief insurance companies on the implementation. Training sessions will be held for actuaries and testing carried out too on the use of the table.
He said that according to the results of preliminary actuarial calculations announced by the consultant hired by the FRA to prepare the local actuarial table, the actual average mortality rates in Egypt are less than 20% of those reflected in UK tables.
Although most life insurance companies use English life tables, which represent a time gap of more than 50 years, there are insurers that price their insurance policies using English life tables with a time gap of up to 60 years, in addition to some which load transactions without any reference to any actuarial study. These practices explain the discrepancy in the pricing bases used by insurance companies.
The use of the first Egyptian actuarial table will lead to a change in the prices of life insurance policies in the market, said Mr Hesham. The price changes depend on the average death rates at different ages.
Some challenges were encountered during the compilation of the Egyptian actuarial table, he said. This included the incompleteness of the customer database of some insurance companies and the lack of linkages between the issuance of life insurance policies and compensation paid.
He said that the challenges prompted the FRA to draw up a unified model for data collection that must be adopted by life insurance companies to ensure the completeness of data.
The Social Foundation of African Reinsurance Company is financing the project to produce Egypt’s first local life table. M