The recent move by the Egyptian government to hike fuel prices would lead to lower vehicle sales, meaning that the number of new cars that are insured would in turn fall, according to a senior insurance industry executive.
Mr Saied Bayoumi, executive vice president of Egyptian Takaful Insurance Company, said that insurance companies may then turn to different tactics to attract customers, such as cutting motor premiums, reported Al Mal News.
The Egyptian government hiked fuel prices on 5 July in another round of subsidy cuts designed to overhaul the country's ailing economy and meet the requirements of a large bailout loan taken in 2016 from the International Monetary Fund. The price of 92 octane gasoline increased by about 18% to EGP8 ($0.48) per litre while the price of 80 octane gas rose by nearly 22% to EGP6.75 per litre.
The auto market has been seen sales decline for months due to expectations of customers of large price reductions with the introduction of the latest tranche of tariff reductions on European imports, said Mr Alaa Al-Sabaa, member of the General Automobile Division of the Federation of Chambers of Commerce. Customers held back on purchases in anticipation of lower prices.