الهيئة العامة للرقابة المالية

 Dr. Mohamed Farid, FRA Chairman:

• A comprehensive legislative and regulatory overhaul is needed to enhance insurance’s role in the national economy
• Accelerating digital transformation is fundamental to achieve inclusive insurance. Without technology, we cannot reach our desired goals
• The Unified Insurance Law marks a new era for the insurance sector by introducing innovative coverage and regulations that enhance the sector’s competitiveness and attract investment
• New amendments to enhance and activate the role of private pension funds, with a new philosophy and approach that meets the diverse needs of businesses and provides insurance coverage for individuals
• By fostering strategic partnerships and diligently listening to the market, we aim to cultivate an environment that nurtures industry growth
• A collaborative effort between FSI and AmCham’s aims to bolster the skills of those who shape and execute policies
• Insurance premiums surged by a significant 34% annually, reaching EGP 82.3 billion by the end of June 2024

Dr. Mohamed Farid, FRA Chairman held an extensive dialogue with AmCham’s Insurance Committee during AmCham’s Breakfast Briefing. The discussion focused on the Authority’s comprehensive strategy and policies aimed at enhancing the insurance sector’s role in the national economy. It also delved into the ongoing initiatives, plans, and programs designed to develop and enhance the sector’s competitive capabilities. The ultimate goal is to bolster overall stability within the sector and its constituent institutions, address all developmental gaps, and shed light on the Unified Insurance Law enacted last year. This law serves as a unified and comprehensive legal framework that regulates the insurance sector, aligns with global best practices and developments and integrates with the Egyptian government’s national development priorities.

The meeting witnessed significant participation and a strong turnout from all companies operating in various insurance activities and branches within the Egyptian market. Dr. Farid delivered a keynote speech during the event, in which he reviewed all the developments, the latest performance indicators and the objectives that the Authority prioritizes for the upcoming phase. He also shed light on the Unified Insurance Law. Following this, a discussion session and a dialogue were held, moderated by Alaa Elzoheiry, President of the Insurance Federation of Egypt. Haitham Taher, Vice President of the Insurance Federation of Egypt, Mohamed Ayyad, Director of FRA’s Media Center and Dr. Tarek Seif, FSI Executive Director, attended the session.

Dr. Mohamed Farid commenced his address by outlining the philosophy and objectives of the Unified Insurance Law No. 155 of 2024. This law serves as a comprehensive legislative framework that consolidates four previous laws governing the insurance sector. He emphasized that the law encompasses all global developments and practices, aligning seamlessly with the Egyptian state’s vision and developmental goals, particularly in enhancing insurance penetration. Dr. Farid stressed the paramount importance of evolving traditional business models, as they are no longer sufficient to achieve the desired targets. He advocated for a genuine transformation of these models to become more technology-driven, thereby propelling the sector’s progress and maximizing its contribution to the national economy.

He further highlighted that the Law’s philosophy and objectives revolve around bolstering the financial stability of all entities operating in insurance activities and fostering insurance inclusion through accelerated digital transformation. The Authority places significant emphasis on developing and growing the insurance sector to expand the base of beneficiaries of insurance services. This is being achieved through multiple development and advancement pathways aimed at improving governance standards and safeguarding the rights of policyholders.

Therefore, the Authority has formed specialized committees and working groups to prepare and draft the executive regulations and decisions that align with the market’s requirements and the sector’s needs. In parallel, there is an ongoing approach of conducting an open dialogue with all relevant parties to listen to their opinions and suggestions to enhance the developmental impact of the legislation and facilitate the swift implementation of decisions. This aims to develop and grow the non-bank financial markets while protecting the rights of all stakeholders.

Dr. Farid explained that the Unified Insurance Law will enhance insurance inclusion efforts and expand the base of beneficiaries. This, in turn, benefits the national economy and gross domestic product.

In this regard, he emphasized the Law’s objective to enhance insurance’s contribution to the gross domestic product and increase the beneficiary base through compulsory insurances. The new law introduces several compulsory insurances and empowers the Authority’s Board to propose a range of compulsory insurances suitable for the Egyptian market based on specialized technical studies, subject to a decree by the Council of Ministers. The law specifically outlines coverage types such as government assets insurance, divorce risk insurance, cyber risk insurance, and certain professional liability policies. These compulsory insurances are currently under study for gradual implementation in the future, in a manner that serves all relevant parties.

He added that the issuance and implementation of the Law support efforts to achieve sustainable growth, enhance the insurance industry’s ability to attract more investments and provide new insurance coverage for various segments of society. He affirmed that the Authority is always working to ensure that its decisions contribute to achieving an impact and added value to the sector and the Egyptian economy and society as a whole. It also empowers individuals to benefit from non-bank financial services, helping them achieve their goals and improve their circumstances by investing in diverse asset classes.

FRA Chairman indicated that as of the end of 2024, 39 insurance companies are subjected to the Authority’s supervision, including 17 life insurance companies and 22 property insurance companies. Additionally, there are 96 insurance brokerage firms, 31 loss-adjusting companies, and 9 consulting firms.

He highlighted a significant increase of 34.1% year-on-year in total premiums collected, reaching 82.3 billion Egyptian pounds in the fiscal year ending in June 2024, compared to 61.4 billion pounds in the previous fiscal year. Regarding claims paid, he indicated that total claims paid increased by 34.2% year-on-year to 36.7 billion Egyptian pounds in the fiscal year ending in June 2024, up from 27.3% in the 2022/2023 fiscal year. Total investments recorded 298.2 billion Egyptian pounds in June of the previous year, compared to 208.8 billion Egyptian pounds in June 2023.

Dr. Mohamed Farid emphasized the crucial role of micro-insurance as a mechanism for economic development, especially in light of the numerous challenges faced in recent years. These challenges include the COVID-19 pandemic, geopolitical risks, unprecedented inflation rates, and natural disasters resulting from climate change. This has significantly increased the responsibility of insurance companies to provide suitable coverage and protect both the national economy and individuals from the consequences of such risks.

He noted that micro-insurance serves to increase insurance penetration by providing coverage against risks faced by small and medium-sized enterprises, as well as micro-enterprises. Insurance companies have aimed to reach low-income segments of society by entering into contracts with microfinance institutions and associations to offer life and disability insurance protection to recipients of small and micro -financing.

In line with the Authority’s mandate to supervise and regulate non-bank financial markets and instruments, particularly by issuing rules and regulations to enhance the insurance sector’s capabilities and its contribution to the national economy, Dr. Farid highlighted the issuance of Board of Directors’ Decree No. 196 of 2024. This decree established a minimum capital requirement of 40 million Egyptian pounds for micro-insurance companies, in accordance with the provisions of the Unified Insurance Law.

FRA’s Chairman emphasized the importance of digitizing financial transactions for insurance companies. He stated that companies can not achieve insurance inclusion and reach customers without digital transformation and technological applications. He explained that technological advancements impose challenges and responsibilities on regulatory authorities to protect the rights of customers and ensure the stability and sustainability of the business. However, he also emphasized the critical importance of financial technology in achieving higher levels of financial inclusion, stressing that without technology; efforts to achieve insurance inclusion would be futile.

He added that FRA is continuing to issue a series of decisions and regulations to enhance the sector’s capabilities, expand the beneficiary base, and introduce new, advanced products and coverages, in implementation of the Law and in response to the evolving needs of various businesses and individuals. He mentioned that the coming period will also witness the introduction of many new insurance products related to private insurance funds, especially in the private sector.

Dr. Farid emphasized the Authority’s commitment to maintain ongoing communication with the market. He stated that the Authority’s decisions and actions are informed by discussions with all market participants, while also staying abreast of international best practices in this area.

During the meeting, Sylvia Menassa, CEO of AmCham Egypt announced that the requirements for a partnership between AmCham and the Financial Services Institute (FSI), the training arm of the Authority, are nearing completion. This partnership aims to develop and deliver a training program to enhance the capabilities of professionals in the non-bank financial sector.