Egypt: Inflation and currency problems to drag on insurance market growth in 2024
Source: Middle East Insurance Review | Mar 2024
Growth in the insurance market in Egypt is expected to slow in 2024, coinciding with many economic challenges and problems, in particular, inflation and the exchange rate, according to insurance expert Ahmed Ibrahim.
He told Al Mal News that many challenges in the insurance market are beginning to emerge in 2024 such as re-evaluating risk and the need for repricing due to inflation.
He pointed to the challenge that insurance companies face with reinsurers, which is paying reinsurance premiums in USD, which represents a burden on the sector because of a depreciating EGP.
Mr Ibrahim highlighted the need to establish a national reinsurance company, to curb foreign exchange flows overseas to pay reinsurance premiums to foreign reinsurers.
The idea of a locally incorporated reinsurance company has been proposed several times over the years.
The total premiums collected by insurance companies in the financial year ended 30 June 2023 (FY2023) stood at EGP70bn ($2.2bn), 24.7% higher than the EGP56.2bn raked in during FY2022, according to official data.
The urban inflation rate in Egypt in 2023 hovered at around 35%. Egypt has devalued its currency three times since March 2022, which has resulted in a depreciation of approximately 70% against the US dollar. M