Experts said insurance firms have posted bad financial results in FY 2011/2012 due to the political turmoil Egypt witnessed in the last fiscal year, expecting upcoming political stability to boost growth in the insurance sector after electing a new president after the revolution.
Ali Bashendy, deputy head of accident insurance committee at Insurance Federation of Egypt and head of technical affairs department at AMIG, said insurance sector witnessed better results in FY 2011/2012 that these of FY 2010/2011. Insurance market witnessed deterioration as factories and large economic projects stopped. AMIG succeeded in achieving its plan by reporting premiums of EGP 330 million and a surplus in insurance activity in FY 2011/2012, he added. As the political scene is expected to be stable in FY 2012/2013, investments will be back to the market and economy will recover and accordingly insurance market will flourish, Bashendy affirmed.
Ahmed Morsi, head of engineering insurance committee at Insurance Federation of Egypt and head of technical affairs department at Egyptian Takaful-Property, said political and economic stability will bring investments back to the Egyptian market. He expected Egypt to witness stability and improvement in the new fiscal year after the losses the country incurred in the second half of FY 2010/2011 and FY 2011/2012 that followed 2011’s revolution. Despite the turmoil, Egyptian Takaful-Property’s engineering insurance sector witnessed 10% growth in FY 2011/2012 as demand increased over insurance coverage against political violence, he explained.
Sayed Bayoumi, head of investment sector at Egyptian Takaful-Property, said the security and political stability will contribute in increasing foreign cash inflows to the country in the upcoming period and accordingly insurance market will be affected positively. The last fiscal year was the worst year for insurance and economy due to the unrest Egypt witnessed such as the strikes, protests and sit-ins. As a president was elected, the economic situation improved slightly as the stock market recovered EGP 28 billion in the last week, Bayoumi noted, adding that Egyptian Takaful-Property will venture in new investments in the next period.
The Egyptian economy is expected to adopt an Islamic approach under an Islamist rule by investing in sukuk (Islamic bonds) and establishing Islamic banks, Bayoumi concluded.
