The number of private insurance funds in Egypt rose to 670 at the end of last year, compared to 664 at end-2017, and the number of members of private insurance funds reached 4.9mn in 2018 compared to 4.7m in 2017, according to a report of private insurance funds for 2018, issued by the Financial Regulatory Authority.
The 2017 number was derived at after excluding 55 funds which were under liquidation.
Cairo accounted for the lion's share of the number of private insurance funds in 2018, with 343 funds compared to 344 in 2017.
The number of fund members in Cairo alone increased to 3.8m in 2018, compared to 3.7m in 2017. Assets of private insurance funds rose to reach EGP77.53bn ($4.77bn) at the end of 2018, an increase of 11.4% compared to EGP67.99 bnl at end-2017, reported Al Mal.
Total contributions to the funds reached EGP7.8bn in 2018 compared to EGP6.7bn in 2017, representing growth of 16%. Insurance benefits paid totalled EGP7.8bn in 2018 compared to EGP7.1 billion in 2017, an increase of 9.9%.
Private insurance funds are plans established in companies or associations that also pay benefits or periodic salaries to members who find themselves in need. In particular, they play a vital role in the provision and management of pensions.
To promote the growth of the funds, Egypt's new insurance Bill, which was recently finalised, aims to tighten governance, spelling out requirements for members' general meetings and the appointment of the board of directors of the funds. Other proposed amendments to the insurance law that would affect private insurance funds include:
entrusting the management of the private insurance funds' funds to a specialised investment manager,
allowing the establishment of special insurance funds in accordance with the three internationally recognised practices: defined benefits, defined contributions, and a hybrid system. The legislative amendments will also set out the mechanisms and requirements for switching from one system to another.