News Middle East10 Dec 2019

Egypt:Low interest rates spell pluses and minuses for insurers

| 10 Dec 2019

Although insurance companies gain from high interest rates because they increase returns on investments, insurers also benefit from the long-term decline in interest rates, according to Dr Adel Mounir, secretary general of the Federation of Afro-Asian Insurers & Reinsurers (FAIR).

Speaking on the topic of insurance risks and low interest rates, at the CEO Thoughts 2019 Conference held on 8-9 December in Cairo, he said that low interest rates encourage new investments and government projects which will need insurance coverage, and thus will increase demand for insurance.

He pointed out that Egyptian insurance companies are inconsistent in their pricing, reported Al Mal. Their return on investment is large, and they compensate for technical losses through their investment returns, saying that there is no concern about a decline in interest rates as long as they remain above 10%, which is the situation at present.

Conference delegates also heard about the legislative and structural reforms implemented by Egypt.

Mr Hisham Tawfiq, Minister of Public Business Sector, who also spoke at the conference, said that the reforms and projects implemented by Egypt are necessary to attract foreign investments, but more measures are still needed, especially with regard to reducing interest rates and reviewing energy prices so that the economy would be more competitive.


 

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