Egypt: Study being conducted on setting up a reinsurer
A study is currently underway to examine the feasibility of establishing a reinsurance company with Egyptian-Arab capital amounting to at least EGP1bn ($63.6m) and with its hub in Cairo, according to the Financial Regulatory Authority vice chairman Reda Abdel Moaty.
Mr Moaty told Al Mal that insurance companies from Egypt and other Arab countries will contribute to the capital of the proposed reinsurer. The new reinsurer will be established along the lines of the African Reinsurance Company.
He said that contact has been made with a number of major entities in Arab markets, and it is agreed that Cairo would be a hub for the reinsurer’s operations, regardless of the size of the stake of Egyptian companies in the reinsurer.
The aim of establishing the company is to support Arab insurance markets, as well as to
compete for a slice of the reinsurance pie in the global market, he said.
Change in reinsurance rules likely
Mr Moaty pointed out that the new company, after its establishment, will lead to a change in rules and affect dealings with foreign reinsurers. Reinsurance contracts will thereafter be restricted to major entities that have the capability to comply with the new conditions. The proposed reinsurer will represent a strong Arab alternative, and it will have an impact on the reinsurance map.
There are two other reasons to consider revising reinsurance rules, he said. The first is related to the changes that the world is witnessing, such as geopolitical risks. The second is related to the need to modernise regulations that were promulgated in 2014. M