Africa Re Spurs Reinsurance Sector In the Continent
Royal Eyes Capital Increase Up To EGP 100 Mln
EGP 300 Mln Forecasted Insurance Premiums in 2013
Political Turmoil Clogs Insurance Awareness
The insurance sector in the African continent has recently witnessed remarkable breakthroughs backed by the inception of The African Reinsurance Corporation (Africa Re).
During an interview with Amwal Al Ghad, Hassan Darwish – Vice Chairman & Managing Director of Royal Insurance Company – further stated that Africa Re is addressing the reinsurance sector in the continent and the company benefits from a compulsory cession arrangement across the African region. The compulsory cessions accounted for only 10% of total premiums.
Mr. Darwish also referred to the complexities of making expansions by the Egyptian insurance firms in Africa within the current period. He said these complexities come in the light of the humble capitalizations. The capitalization of most of the insurance firms in Egypt, except for the state-owned Misr Insurance Co. and Misr Life Insurance Co., do not exceed EGP 100 million.
He affirmed that the international expansions contribute to achieving stronger investment returns and diversifying risks which in turn will reduce the volume of compensations incurred by insurers amid the current political and economic disturbances.
Darwish revealed that the company’s strategy for the next five years targets to expand in the market to acquire a 20% market share, achieve premiums worth EGP 300 million with an increase of EGP 80 million compared with a year earlier and raise capital by EGP 40 million to reach EGP 100 million.
In addition, Royal Insurance Company plans to expand geographically in the upcoming period through launching two new branches in Suez and Damietta after it recently inaugurated a new branch in Port Said, to raise the number of its branches to 14, he noted.
He emphasized that the latest incidents in the Canal Cities did not hinder the companies’ expansions in this region; referring that the three Canal Cities are promising ones in the coming period; especially they acquire the country’s consideration at the current time through establishing a number of strategic ventures.
Darwish stated that the company’s market share reached 6% of the Egyptian insurance market to rank the fourth among the insurance companies, about 29 ones. The company achieved this position due to its high efficiency in the market along with its commitment to paying the reimbursements and getting the premiums, in a way that increased the client’s trust in the company.
There isn’t any obstacles with the other foreign reinsurance companies due to the good results achieved by Royal Insurance, besides the trust and the every mutual relations between the foreign reinsurance companies, which lasted as to 11years. He explained that the only threat facing the reinsurance agreements is represented in the current incidents in the countries, along with the continuity of the political and economic instability; mentioning that the company has already started to conduct negotiations with the reinsurers in order to renew the reinsurance agreements at the beginning of July, 2013.
Darwish has emphasized that the insurance sector is like the economic sectors faced many crises recently which affected by the political and security unrest situation in Egypt, resulting slowness in investment flows in the Egyptian market, alongside many domestic investments and major projects, that the insurance sector mainly relied upon in offering its insurance products, have stopped and this had negative impact on the sector.
He further has indicated that these events have a remarkable positive side on the sector, representing in the growth of insurance awareness among a wide segment of customers, as they concerned from these events, therefore they were pushed to the insurance as the protection way to themselves and their properties.
In the past Clients were looking for the insurance as a kind of red tape for establishing projects , but now it becomes necessary for them, and not as entertaining as they thought, which contributed for the increase of their awareness, with no cost for the companies, as well as spreading new insurance coverages in the Egyptian market.
