Insurance experts affirmed that the future of the insurance market in Egypt highly depends on the economic and political conditions of the country. Experts noted that the political and economic stability is the main factor which encourages the creation of new projects and attracts new investment to the country, stressing that the economic recovery will be reflected positively on the insurance sector.
Hussam Abdel Rehim, deputy chairman of Egyptian Insurance Brokers Association (EIBA) and executive director of Al-Ahly Insurance Brokerage, expected new insurance brokerage companies to enter the Egyptian market in 2013, but the number of these new companies will be less those who entered the market in the last three years because insurance brokerage companies wait the political and economic situations to stabilize as the insurance market highly relies on economic activity.
Essam Rashed, head of Marine Hull Insurance Committee at the Insurance Federation of Egypt and general manager of Marine Insurance sector at Suez Canal Insurance Company, affirmed that the future of insurance market in Egypt will be affected by the economic and security reform expected to be implemented in the coming period.
Political stability will lead to economic growth, and will accordingly lead to the recovery of insurance sector as it depends on new projects and investments, he explained. The economic situation in the next year will be determined by the people who will either continue to hold protests and strikes or choose to increase production rates in 2013, he added.
Rashed expected some of the insurance brokerage company to divest from the Egyptian market because of the turmoil in Egypt.
Ibrahim Labib, deputy head of Motor Insurance Committee at the Insurance Federation of Egypt (IFE) and head of Motor Insurance sector at Delta Insurance Company, also affirmed that the insurance sector’s recovery depends on the political and economic conditions which are expected to stabilize in the upcoming period.
The economic stability will increase the car purchasing rates and the number of motor insurance policies, Labib noted. Extending the motor insurance regulation, which states that the customer shall incur either 25% of the value of compensation or a 50% increase in the charges, for the next year will reduce the insurance companies’ losses in 2013.
