The Central Bank of Egypt's (CBE) move to ease its monetary policy-supported by declining inflation rates-will increase the ability of insurance companies to offer customers more competitive premium rates, as insurers expect to pay less compensation, contributing to stabilising insurance prices, according to Mr Omar Gouda, former managing director of Misr Insurance.
Interest rates in Egypt have dropped by 525 basis points (bps) so far this year, when the Monetary Policy Committee (MPC) cut rates three times—225 bps in April, 100 bps in May and 200 bps in August.
Mr Gouda told the Masrawy news platform that interest rates are a double-edged sword. On the one hand, lowering them encourages investment and increases economic activity, which in turn increases demand for insurance products. On the other hand, a decline in investment returns for insurance companies leads to a decline in a portion of their direct revenues.
Citing motor insurance as an example, Mr Gouda said, "When the Central Bank raised interest rates last year, the costs of vehicle repairs surged, leading to higher insurance premiums. This discouraged customers and caused a drop in car insurance sales, negatively impacting the sector."
In 2024, interest rates were raised to curb inflation. Egypt's annual headline inflation rate in January 2024 was 31.2%. It fell gradually over the intervening months to 24.1% in December the same year. The inflation rate dropped further in 2025 to date, to 12% in August 2025.