The insurance sector is a key pillar of the Egyptian
non-bank financial sector. It plays a vital role in supporting the economy and
ensuring financial stability. It also helps to promote national investment and
provides financial protection for individuals and businesses against various
risks.
The insurance sector also serves as a primary channel for
mobilizing national savings to finance national investment and development
plans, creating new jobs, and reducing inflation. Additionally, private pension
funds provide additional retirement benefits to their members.
It is worth mentioning that FRA has made significant
progress towards implementing international supervision standards for the
insurance industry. To this end, FRA strengthened the regulatory framework for
the insurance sector and diversified services provided to the stakeholders.
Moreover, the FRA streamlined a raft of regulatory measures
and procedures, increased the efficiency of its staff, and developed the
capabilities and competencies of insurance professionals.
Vision & Strategy:
The FRA has adopted a clear-cut strategy to increase the
insurance sector’s contribution to GDP through a raft of key pillars, most
notably:
- Continuously
updating the regulatory framework governing the insurance activity to
align with the latest standards issued by international standard setters. - Developing
the business environment by introducing new insurance products, especially
green and micro-insurance. - Developing
the insurance sector’s operation mechanisms by adopting digital
transformation and artificial intelligence to increase the penetration
rates and setting rules for the targeted groups and entities using
electronic applications and processing, digital marketing platforms, and
telecommunications firms. - Creating
integration with other financial sectors, especially the bank sector
(bancassurance) and postal sector (postal insurance).
Characteristics of the Egyptian Insurance Market
- A
variety of insurance types
The Egyptian insurance market offers a variety of insurance
products, including personal insurance, property and liability insurance, and
micro-insurance. These types can be practiced through traditional commercial
methods, Islamic Takaful methods, or micro-insurance methods, which are integrated
with microfinance.
- Multiple
insurance entities
The Egyptian insurance market is characterized
by the presence of various insurance entities, depending on the type of
insurance, including:
- Insurance
companies
Insurance can be practiced through individual insurance
companies or through insurance pools established between companies to manage a
specific type of insurance.
- Government
pension funds
The law has granted these funds an independent legal
personality to practice specific types of insurance that Egyptian state
agencies and units wish to engage in for particular reasons.
- Private
pension funds
Private pension funds are one of the most important forms of
savings tools and should be registered with the FRA as separate legal entities.
They provide insurance, social, and healthcare benefits to a group of
employees.
Private pension funds are one of the most essential forms of
savings tools. They are special insurance systems registered with FRA and have
legal personality upon registration. These funds, which are separated from the
entity establishing them, provide benefits to a group of the entity’s
employees, including insurance benefits, additional pensions, and social or
healthcare benefits.
Insurance Federation of Egypt
The Insurance Federation of Egypt (IFE) was established to
represent insurance companies and promote the development of the insurance
sector.
Insurance intermediaries
The law allows insurance and reinsurance companies to open
representative offices in Egypt to work in the insurance consultancy market,
public relations, and communications.
The insurance sector also includes certain professions
(Individuals or companies) licensed by FRA to work in the insurance industry.
Recently, the Egyptian insurance sector has witnessed
remarkable progress, thanks to the efforts of FRA and various stakeholders in
the sector. The sector is expected to continue growing over the coming years,
supported by the government’s initiative to promote financial inclusion and
increase awareness of the importance of insurance among the population.