Royal Insurance has submitted an application to the Financial Regulatory Authority (FRA) for a licence to carry out the petroleum insurance business, in order to expand into new fields.
Mr Ahmed Darwish, Managing Director of Royal Insurance, said that his company fulfills all the requirements laid down by the FRA for insurers in the oil sector, reported Al Mal News. The requirements include:
- specialised technical underwriting management in oil insurance
- specialised reinsurance agreements with international companies
- a capital base deemed sufficient to meet the size of risks that can be accepted in oil business
- appointment of specialist technical cadres with at least 15 years of experience.
He said that the goal is to start offering oil insurance next November through the introduction of four new products, after the company has obtained FRA approval. The insurance products will cover excavators, oil service stations, pipelines, and refineries, during the stages of exploration, construction and production.
Currently, oil insurance in the Egyptian market is offered by five insurers, out of a total of 23 insurance companies. Royal Insurance will become the sixth player.
Mr Darwish pointed out that the FRA allows property insurance companies to carry out oil activities if their capital exceeds EGP100m ($6m). Therefore, in the past three years, Royal Insurance has worked to increase its capital to EGP125m currently and will further increase it to EGP150m in October. He pointed out that the new increase will be financed by profits. He added that the capital will continue to be raised gradually to EGP200m.