Dr. Islam Azzam – FRA Vice Chairman:
- Financial stability, stakeholders’ protection and financial inclusion stand as FRA’s core pillars
- New regulations are being finalized to protect policyholder rights and streamline complaint resolution procedure.
- FRA is developing governance regulations for entities subject to the unified insurance law.
- Micro-insurance’s role has expanded significantly; it now serves as a fundamental tool for fostering economic and social empowerment within marginalized groups.
- FRA aims to balance insurance protection with evolving economic conditions to enhance micro-insurance capabilities.
- The Unified Insurance Law represents a qualitative leap in the development of the legislative framework regulating the Egyptian insurance market.
- FRA will continue to develop legislative and regulatory frameworks and provide supportive initiatives to improve the efficiency of the micro-insurance market.
Dr. Islam Azzam, FRA Vice Chairman delivered a keynote speech yesterday evening, Wednesday, at the 4th Micro-insurance Conference and 10th Africa Regional Conference on Inclusive Insurance – AFCII 2025. The Insurance Federation of Egypt “IFE” organized the conference which brought together representatives from Munich Re Foundation, Finprobity Solutions, The Micro-Insurance Network and key players in Egypt’s insurance sector.
During his speech, Dr. Azzam highlighted the significant changes and rapid progress shaping Egypt’s insurance sector. He stated that this reflects the national commitment to establish financial inclusion and expand social protection for marginalized groups.
In addition, he announced FRA’s plan to issue crucial regulations soon to safeguard stakeholders and simplify handling and resolution of insurance complaints. He also mentioned the upcoming implementation of solvency rules based on the latest risk-based capital assessment techniques.
Furthermore, FRA will enforce governance standards for entities under the Unified Insurance Law. This will result in insurance company boards with diverse expertise, including independent members and women and the formalization of key board committees for internal audit, risk, technology, and investment.
Dr. Azzam affirmed that this aligns with Egypt’s endeavor to achieve comprehensive and sustainable economic, social, and environmental development. Consequently, FRA has established an ambitious vision aimed at realizing a dignified and economically and socially secure life for all citizens, with a focus on enhancing financial inclusion and integrating new segments of society to drive economic growth.
Also, he clarified that micro-insurance has evolved beyond a limited insurance product to become a crucial instrument for economic and social empowerment of marginalized and low-income groups. It is a vital pillar supporting Egypt’s drive for financial inclusion and sustainable development. Dr. Azzam underscored FRA’s firm belief in the pivotal role of micro-insurance in fostering social justice and providing appropriate insurance protection to the most vulnerable, responsive to economic shifts and development requirements.
FRA Vice Chairman further noted that Egyptian insurers offer tailored insurance coverages to safeguard owners of small, medium and micro enterprises against potential risks like death, disability and loan default. This complements insurance against risks directly affecting the businesses themselves, such as fire and burglary.
These initiatives extend to agriculture, where insurers provide coverage for farmers protecting crops, livestock and poultry, thereby bolstering their food and economic security.
He affirmed that micro-insurance is a cornerstone of empowering and protecting vulnerable groups from economic risks. Consequently, FRA has been actively developing the legislative framework for micro-insurance since 2016, incorporating key provisions to advance this sector. This aligns with FRA’s strategy to strengthen the digital infrastructure of distribution channels, supporting Egypt’s direction towards financial and insurance inclusion.
He highlighted the evolution of the maximum sum insured for micro-insurance policies since the initial regulations governing this activity in 2016, reflecting economic changes and FRA’s ongoing adaptation through successive regulatory and legislative amendment.
He emphasized that the ratification of the Unified Insurance Law marked the most significant development in Egypt’s insurance sector over the past year, a paradigm shift in its legislative framework. This law governs insurance and reinsurance, as well as related services, professions and supporting activities. Crucially, it grants FRA exclusive power to establish, license, supervise and control entities in this field, enhancing regulatory effectiveness and fostering a more stable and transparent ecosystem.
Dr. Azzam pointed out that since the Unified Insurance Law’s enactment; FRA has actively taken substantial steps to regulate and develop Egypt’s insurance market by creating legislation and controls that promote a stable and growth-oriented regulatory environment.
Within this context, FRA is continuously working to enhance the sector’s efficiency and effectiveness by issuing enabling legislation and regulatory procedures. A key element is strengthening the insurance sector’s regulatory structure through numerous supportive laws and actions. FRA has issued various regulatory controls and decisions, notably introducing new rules for determining the minimum capital requirements for insurance companies under the Unified Insurance Law. This required companies to increase their capital in two phases, reaching EGP 600 million in the second phase, to bolster financial solvency.
Moreover, FRA has established rules, controls, and specific ratios for the investment of insurance and reinsurance funds to balance return and risk and optimize asset management. It has also set binding deadlines for preparing and submitting financial statements for insurance companies and pools, thereby embedding principles of transparency and financial governance.
To ensure sound and sustainable fulfillment of insurance obligations, a regulatory framework for calculating and forming technical reserves related to property and liability insurance has been established. Furthermore, the maximum insurance coverage for micro-insurance has been increased, broadening protection for target groups and enhancing insurance inclusion.
On the other hand, new rules governing the establishment and licensing of insurance and reinsurance companies have been issued, outlining legal and technical requirements to ensure the quality and efficiency of new entities.
Additionally, technical rules for calculating and forming technical reserves specific to life insurance and fund accumulation operations have been issued, bolstering companies’ financial stability and safeguarding policyholders’ rights.
It is worth mentioning that micro-insurance has witnessed a significant evolution in coverage limits, starting at EGP 100,000 with the initial regulations in 2016 and gradually increasing to keep pace with economic changes, reaching EGP 200,000 in 2021 and EGP 242,000 in 2024.
The Unified Insurance Law set a maximum limit of EGP 200,000, empowering FRA’s Board to increase it by 25% annually. Consequently, the limit was raised to EGP 250,000 and then to EGP 312,500 in 2025, reflecting FRA’s policy to adapt to market developments and promote insurance inclusion.
These decisions underscore FRA’s dedication to align insurance protection needs with economic realities, thereby strengthening micro-insurance market’s ability to reach target segments and effectively drive insurance inclusion.
As part of this framework, the Unified Insurance Law mandated the allowance of specialized companies in this sector, a move reflecting Egypt’s commitment to empower vulnerable groups and broadening insurance inclusion.
FRA has established a minimum capital requirement of EGP 40 million for new micro-insurance companies as part of its regulatory framework. This initiative has contributed to significant positive outcomes in micro-insurance sector during the fiscal year ending June 30, 2024. Dr. Azzam highlighted the progress in financial indicators and overall performance, emphasizing FRA’s commitment to foster financial inclusion, support vulnerable groups and expand access to insurance services.
The sector witnessed substantial growth, with 15 companies issuing approximately EGP 2.3 million policies, leading to an increase in the number of insured individuals to 10.5 million, a notable 10.3% rise compared to the previous year. Furthermore, FRA actively promotes the digital transformation of insurance sector, recognizing financial technology as a crucial tool to extend the reach of micro-insurance and enhance financial inclusion and social protection for those most in need.
Dr. Azzam outlined key initiatives driving FRA’s strategy, prominently featuring the digitalization of insurance policy issuance for common types like compulsory vehicle, temporary life, personal accident and micro-insurance, a move grounded in Decree No. 121 of 2015 and its subsequent amendments.
Complementing this, FRA has actively issued other decrees that foster digital transformation, alongside supplementary decrees to the Financial Technology Law No. 5 of 2022. Notable examples include Decree No. 139 of 2023 addressing technological infrastructure and security, Decree No. 140 of 2023 regarding digital identity, digital contracts and digital records and the requirements for authentication and Decree No. 141 of 2023 regarding Outsourcing Registry for companies engaged in FinTech activities offering outsourcing services.
These efforts are in line with FRA’s broader vision to build a robust digital infrastructure for the non-bank financial sector, fostering innovation and enhancing the efficiency of insurance services. This strategic direction mirrors global technological trends and directly enhances Egypt’s financial inclusion goals.
Dr. Azzam reaffirmed FRA’s dedication to the ongoing development of legislative and regulatory frameworks and the introduction of supportive initiatives and policies. These continuous improvements aim to enhance the effectiveness of the micro-insurance market and achieve broader goals related to social protection, financial sustainability and economic inclusion.
Last modified: May 12, 2025