The current status of the
insurance sector in
Egypt
(A)The current status of insurance sector in
Egypt
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Market structure
Life insurance
Non-life insurance
Reinsurance
Investments
Regulation and supervision of insurance
Market structure
The Egyptian Insurance Market composes of :•
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The Supreme Council of Insurance
The Egyptian Insurance Supervisory Authority (EISA)
17 direct insurance companies, 6 of which are composite, 6 are
non-life, 3 are transacting life insurance, one is transacting
credit insurance for exports and one cooperative society
Another 2 new life insurance companies have just licensed
A specialized reinsurance company
614 Private Insurance Funds
The Government Insurance Fund for fidelity guarantee
Insurance Federation of Egypt
Insurance Pools
Cargo supervision & surveying office of Egypt
The Supreme Council of Insurance
FORMATION
Formed under the chairmanship of the Minister of Planning
and the membership of :
- The chairman of EISA and his deputy
- The Chairmen of the insurance and reinsurance companies
- A representative of the insurance funds.
- Two insurance Professors from the Egyptian Universities.
- A Chancellor from the Council of State
- A representative from
the Public Sector Information Center.
Ministry of Planning
Ministry of Finance
the trade unions organization of the insurance sector
each of the auxiliary organs
ROLE
The Supreme Council of Insurance has the competence to
decide the general objectives of the insurance activity and to
approve the policies needed for the achievement of these
objectives.
The Egyptian Insurance Supervisory Authority
(EISA)
EISA has the competence to supervise and control the
insurance activity in Egypt whether at the establishment,
during transaction or at the termination of the business.
The Authority in particular aims at the implementation of the
following objectives :-
1- to protect the rights of insurance policyholders, the
beneficiaries and third parties.
2 - to secure the achievement of the economic and social
objectives of insurance activity and preserving the national
savings.
3 - to secure the soundness of the financial positions of the
Insurance market units, coordinating among them and
preventing any conflict between them.
4 - to participate in developing insurance awareness in the
country
5 - to strengthen the ties of co-operation and integration with
the other control and supervisory authorities at the Arab,
African, and world level.
6 - to promote the insurance professions and to contribute
effectively to the availability of the expertise.
Market Structure Table
02/03 Figures (in L.E. Million)
Insurance
Companies
No.
Paid-up
Capital
Shareholder’s
Fund
Policyholder’s
Fund
Total
Assets
Premium
Income
State Owned
Composite
3
1260
2006
7987
12003
2089
Private
Composite
3
110
294
720
1382
353
Private Non-life
6
192
193
164
601
210
Private Life
3
130
101
220
359
216
Cooperative
1
11
13
11
35
15
Credit
1
10
10
1
100
1
Medical
-
-
-
-
-
0
Reinsurance state
owned
1
425
578
1304
2537
371
Total
18
2138
3201
10407
17017
2884
Private Funds
614
---
---
11216
12193
1486
The premium income for Egypt Re is not added to the total premium income
The foreign participation of the paid up capital represents 12.3%
LIFE INSURANCE
Life Insurance Business
In Force
98/99
(in L.E. 000)
New Business
99/2000 2000/2001 2001/2002 2002/2003 98/99
99/2000 2000/2001 2001/2002 2002/2003
Number of Individual
policies (in thousands)
622
616
607
614
646
91
89
92
100
120
Sums Assured :
Individual
6709755 7479047 8549921 9883644 12300910 1745595 1850128 2221933 2535142 3590607
Group
20123267 21988845 23185703 24620485 28149952 13675391 14053907 14648568 15053589 17654169
Total
26833022 29467892 31735624 34504129 40450862 15420986 15904035 16870501 17588731 21244776
Premiums :
Individual
271867
297892
341893
402023
547999
74588
76196
93718
114324
194630
Group
257193
301123
311874
282547
355229
152190
146598
118275
105225
160059
529060
599015
653767
684570
903228
226778
222794
211993
219549
354689
Total
Private Funds
1103726 1262638 1352268 1453608 1486226
Life Assurance Sums Assured
(Business In Force)
In Millions of L.E.
20123
23186
21989
28150
24620
18000
16000
12301
14000
12000
9884
10000
8000
6710
7479
8550
6000
4000
2000
0
98/99
99/2000
Individual
2000/2001
Group
2001/2002
2002/2003
Life Assurance Premiums
(Business In Force)
In Millions of L.E.
1104
1352
1263
1486
1454
1000
800
600
400
548
257
272
301
298
342 312
402
355
283
200
0
98/99
99/2000
Individual
2000/2001
Group
2001/2002
Private Funds
2002/2003
NON-LIFE INSURANCE
Direct & Net Premiums
By Class of Business
L.E.000
Class
Direct Premiums
98/99
Net Premiums
99/2000 2000/2001 2001/2002 2002/2003
98/99
99/2000 2000/2001 2001/2002 2002/2003
Fire
297681
278735
286222
262683
319902
117356
108360
111251
79003
94694
Marine Cargo
117806
93072
93183
102251
123521
43012
38629
36957
44942
62460
Inland Transport
12789
12023
12441
13254
18542
6960
7071
8597
9265
14419
Marine Hull
54737
52752
49980
55866
59125
7662
6201
7197
9198
12087
Aviation
56240
77497
132409
181849
257639
19830
21121
20845
27361
37907
Accident
172604
196595
184396
229284
247178
91415
111319
116357
148122
163408
27581
33305
37299
38437
42069
8578
15563
21280
25092
27468
105386
111580
106851
117125
161778
9586
13881
12764
14624
14799
57820
63594
65619
97855
224659
12389
15157
13282
21810
40846
Motor Act
110159
124604
128132
129552
136763
84298
103132
108381
116639
125053
Motor Comprehensive
391159
373629
350632
335070
353837
285122
293621
284980
287849
314889
1403962
1417386
1459715
1563226
1945013
686208
734055
741891
783905
908030
4553
4983
4904
5967
6504
Health
Engineering
Oil
Total
Government Insurance Fund
D ire ct & Ne t Pre m ium s
In Millions of L.E.
1945
2000
1800
1600
1563
1460
1417
1404
1400
1200
908
1000
686
734
742
784
800
600
400
200
0
98/99
99/2000
Direct
2000/2001
Net
2001/2002
2002/2003
Direct & Net Claims
By Class of Business
L.E.000
Class
Direct Claims Paid
98/99
Net Claims Paid
99/2000 2000/2001 2001/2002 2002/2003
98/99
99/2000 2000/2001 2001/2002 2002/2003
Fire
95262
83194
69228
75437
74036
14375
17410
15634
17854
16204
Marine Cargo
29183
36086
36043
38974
39204
7963
13482
12127
12617
14455
3829
4043
4541
5325
4126
1179
1724
2752
4121
2604
Marine Hull
32684
76841
34169
33279
44100
3840
6688
4099
4422
4398
Aviation
14812
290784
149384
634087
450949
8980
18048
10725
14758
13696
Accident
19721
20368
25091
31367
35508
10586
10458
20091
17364
24422
Health
27181
32980
32106
35881
37163
8482
13347
17448
22830
25607
Engineering
68641
52069
41347
42611
48721
4456
7265
3564
4085
5612
Oil
39102
17885
15566
29714
28960
1940
2607
1341
3990
5850
Motor Act
137467
149969
185291
213408
298116
99443
107679
131312
154017
222208
Motor Comprehensive
207990
225027
234020
212666
210976
146903
162286
183310
174691
182025
675872
989246
826786
1352749
1271859
308147
360994
402403
430749
517081
15
8
121
146
168
Inland Transport
Total
Government Insurance Fund
D ir ect & Net Cla im s
In M illions of L.E.
827
989
800
1353
1272
676
700
517
600
500
402
361
400
431
308
300
200
100
0
98/99
99/2000
D ire ct
2000/2001
Ne t
2001/2002
2002/2003
Loss Ratios
By Class of Business
%
Class
Direct Business
98/99
Net Retained
99/2000 2000/2001 2001/2002 2002/2003
98/99
99/2000 2000/2001 2001/2002 2002/2003
Fire
17.3
38.0
35.6
24.4
27.3
5.8
10.9
10.7
26.8
25.6
Marine Cargo
55.8
33.6
43.1
42.8
101.2
14.8
20.0
26.7
33.1
21.4
Inland Transport
33.6
44.3
78.8
6.8
2.8
23.9
51.7
93.7
7.0
10.2
Marine Hull
92.7
102.5
83.3
100.7
146.5
11.1
105.9
97.8
50.0
0.0
Aviation
0.0
1840.1
3.7
338.5
62.2
0.0
9.7
0.0
0.0
39.9
Accident
40.6
26.2
26.6
29.5
27.3
30.5
54.6
44.5
24.2
35.0
Health
97.0
111.7
91.0
98.3
91.8
85.4
119.7
92.9
99.9
91.5
Engineering
0.0
14.6
61.0
26.8
128.1
45.7
53.5
26.4
4.9
0.0
Oil
0.0
70.2
62.8
34.7
46.4
15.1
58.4
33.0
2.6
22.3
118.4
101.9
93.7
193.9
253.6
112.1
103.8
90.1
175.5
224.7
57.6
62.5
59.2
61.9
59.9
57.2
60.9
58.5
62.1
59.8
36.7
139.2
49.9
86.5
74.5
32.1
55.1
49.8
60.3
65.8
Motor Act
Motor Comprehensive
Total
REINSURANCE
Reinsurance
Reinsurance Premiums
By Class of Business
L.E.000
Class
Outward
98/99
Fire
Inward
99/2000 2000/2001 2001/2002 2002/2003
98/99
99/2000 2000/2001 2001/2002 2002/2003
159768
155420
154494
174901
224720
19418
22751
25207
31863
56354
66033
52384
50916
52231
57207
9798
8625
9075
8535
11508
4602
4615
3933
3945
4110
97
0
18
0
0
Marine Hull
48300
41960
35398
41520
43991
3978
4589
4944
4847
7007
Aviation
45029
60853
107470
185410
236654
11349
7185
7769
22096
35433
Accident
58216
64760
58531
62922
75730
4067
3730
5548
6843
8017
Health
12784
13511
11569
9585
9962
0
0
0
0
0
Engineering
72979
78808
78392
87681
130702
2911
3467
3846
5140
7498
Oil
43877
46853
51448
86249
173613
12282
16181
23157
32461
25983
Motor Act
2180
951
3835
2322
3710
0
0
0
0
0
Motor Comprehensive
4376
5680
4135
2771
3010
1190
951
1431
1944
2132
518144
525795
560121
709537
963409
65090
67479
80995
113729
153932
Marine Cargo
Inland Transport
Total
Retained Ratios
By Class of Business
%
Class
98/99
99/2000
2000/2001
2001/2002
2002/2003
Fire
37.1
36.5
36.6
28.3
27.6
Marine Cargo
34.3
38.4
38.3
42.7
49.3
Inland Transport
49.7
53.6
63.8
65.1
74.4
Marine Hull
12.9
11.1
13.7
15.7
19.3
Aviation
29.9
25.3
15.2
13.9
13.3
Accident
49.4
53.1
55.0
61.2
63.7
Health
31.1
46.7
57.1
64.9
64.4
Engineering
8.7
11.9
11.4
12.1
8.4
Oil
19.7
21.5
19.6
19.5
17.5
Motor Act
76.5
82.8
84.6
90.0
91.4
Motor Comprehensive
72.7
78.5
81.0
85.9
88.9
46.7
49.6
49.1
48.0
44.6
Total
Reinsurance Claims Paid
By Class of Business
L.E.000
Class
Outward
98/99
Inward
99/2000 2000/2001 2001/2002 2002/2003
98/99
99/2000
2000/2001 2001/2002 2002/2003
Fire
77625
65948
59103
55107
58050
13410
14102
27467
18552
30051
Marine Cargo
20717
22406
23603
26242
28040
12081
6430
6492
6700
14953
1885
1869
1695
1706
1493
0
3
0
24
0
Marine Hull
30305
70842
33670
28347
43243
4889
3134
3722
3681
9278
Aviation
16506
280589
153240
637744
440645
12166
13662
17578
23716
11444
Accident
9117
11207
9636
13749
7334
2743
3109
8829
9154
5456
Health
13225
13466
10233
8797
7781
0
0
0
0
0
Engineering
57952
17156
32637
30547
40452
1758
2150
1883
4167
3954
Oil
37361
43460
27847
30701
32530
6743
24155
36457
37059
26127
1059
1934
4389
6197
5446
0
0
0
0
0
996
3712
3653
2182
2145
795
1645
1203
2304
1678
266747
532589
359706
841319
667159
54585
68390
103631
105357
102941
Inland Transport
Motor Act
Motor Comprehensive
Total
Reinsurance Loss Ratios
By Class of Business
%
Class
Outward
98/99
Inward
99/2000 2000/2001 2001/2002 2002/2003
98/99
99/2000 2000/2001 2001/2002 2002/2003
Fire
34.7
57.2
57.0
34.4
34.0
50.2
38.1
93.4
72.8
45.4
Marine Cargo
76.7
36.0
55.0
43.6
132.0
45.4
0.0
54.6
47.2
0.0
Inland Transport
33.4
20.1
41.5
16.7
13.2
0.0
0.0
0.0
342.9
0.0
103.1
95.2
91.2
92.4
136.3
20.8
30.4
51.4
52.9
0.0
Aviation
14.3
2131.8
11.1
471.5
55.8
0.0
0.0
0.0
70.7
38.8
Accident
42.0
0.0
28.8
32.0
19.0
89.2
0.0
119.8
123.0
39.8
121.8
100.7
77.7
91.4
82.9
0.0
0.0
0.0
0.0
0.0
Engineering
0.0
0.0
38.6
26.7
123.9
121.2
27.3
42.1
109.6
0.0
Oil
0.0
167.4
88.5
90.4
61.7
131.7
566.3
338.3
271.5
197.9
Motor Act
0.0
225.9
231.2
0.0
405.1
0.0
0.0
0.0
0.0
0.0
Motor Comprehensive
8.2
92.8
63.1
49.3
150.6
0.0
0.0
125.7
102.0
83.2
24.1
268.9
49.8
150.8
68.8
0.0
84.6
132.5
126.1
41.1
Marine Hull
Health
Total
GEOGRAPHICAL DISTREBUTION OF
OUTWARD PREMIUMS
North
America
7%
Arab
18%
Africa
3%
Asia
6%
Europe
66%
INVESTMENTS
Insurance Companies Investments
L.E.000
Channels
98/99
99/2000
2000/2001
2001/2002
2002/2003
Government Bonds
2657683
2707986
2822475
3521347
3810864
Securities & Shares
3822691
4160143
4443919
4333246
4685175
Real Estate
544075
582751
621654
611908
580500
Mortgage
14236
18421
10866
126
6742
Loans to Policyholders
66600
82963
97600
116549
121611
Other Loans
78500
65082
67091
122303
121945
4128410
4424597
4702185
4842310
5361461
11312195
12041943
12765790
13547789
14688298
Fixed Deposits
Total
Private Funds Investments
L.E.000
Channels
1998
1999
2000
2001
2002
Government Bonds
3684818
4267693
4837024
6108824
6924220
Securities & Shares
281949
358275
389546
407933
376322
Real Estate
123933
139568
145126
165695
164675
Loans to Members
116088
140686
138055
185388
124809
1914892
1996226
2491634
2913449
3139055
65861
88953
61851
172861
110886
6187541
6991401
8063236
9954150
10839967
Fixed Deposits
Other Investments
Total
Investments by Companies
L.E.000
Company
98/99
99/2000
2000/2001
2001/2002
2002/2003
Misr
4792399
5029052
5425105
5862466
6274801
Al Chark
2271624
2428008
2558507
2647922
2822795
National
1417922
1499106
1504716
1585878
1657186
Suez Canal
230115
260847
294561
332658
350145
Mohandes
324003
351637
372121
423828
464059
Delta
287396
317242
343383
347656
369615
Pharaonic
78160
93418
108666
105131
121068
Arab Misr Ins. Group
60619
73935
70993
59263
83017
Pharaonic American Life (ALICO)
31905
57470
78440
122294
146679
Co-Operative Ins. Society
0
11001
16190
19519
16190
Egyptian International Medical Ins. Co.
0
3244
0
0
0
Export Credit Guarantee
0
89328
93035
93104
97434
Commercial International Life (CIL)
0
0
48476
58323
122698
ACE CIIC
67648
68448
82929
0
42885
Arab International (Non Life)
77129
79873
91387
109548
73710
Arab International (Life)
0
0
0
0
31568
Royal & Sun Alliance
0
0
0
0
20859
Egyptian Saudi Insurance Home
0
0
0
0
29194
9638920
10362609
11088509
11767590
12723903
1673274
1679334
1677281
1780199
1964395
11312194
12041943
12765790
13547789
14688298
Total
Egypt Re.
Regulation and supervision of
insurance
Legislation
The main insurance legislation regulating the insurance market are
• Act No. 10 of 1981 for the supervision and control of insurance
in Egypt and its amendments by the Act No. 91 of 1995 and Act
No. 156 of 1998
• Act No. 54 of 1975 for the Private Insurance Funds and its
regulations
• Act No. 652 of 1955 for Motor Liability Insurance
Status as regards liberalization and
privatization
Act No. 156/1998 allows private sector entry into the capital of the
state-owned insurance and reinsurance companies
The Act also removed all restrictions on majority foreign ownership
of insurance companies
It also allows non-Egyptians to manage insurance companies based
in Egypt
It is worth to mention here that 8 companies are managed by foreign
managing directors
Status as regards Financial Sector Assessment
Program
Detailed Assessment Report on Observance of the Insurance Core
Principles and Transparency of Insurance Regulation was prepared
by a lead insurance specialist from Financial Sector Department of
the World Bank. The assessment was based on a review of the
legal framework, and focused mainly on the supervisory work of
the Egyptian Insurance Supervisory Authority.
As a result, and according to EISA’s adopted plan of enhancing the
supervision standard in an open market and increased competition,
the following new regulatory decrees have been issued : -
1. The Ministerial decree No.157 for 1999 for the issuance of the
Accounting Measures for Insurance and Reinsurance
companies .
2. The Ministerial decree No. 157 for 2003 amending the
executive regulation by adding an article for setting up an
internal control committee and applying the principles of
corporate governance .
3. According to article (7) of law No.80 of 2002 for combating
money laundering , the rules and measures as well as the
executive procedures for insurance and reinsurance companies
have been issued .
EGYPT
SCHEDULE OF SPECIFIC COMMITMENTS
Modes of supply: (1) Cross-border supply (2) Consumption abroad (3) Commercial presence (4) Presence of natural persons
Insurance Services, the main criteria which the economic needs test apply are as follows:
1.
Surplus demand to traditional classes of insurance gives new companies an opportunity of
working without harmful competition to the market or financial positions of existing
companies and consequently policyholders
2.
Exhausting of 50% of the capacity of the existing companies, which is calculated on the
basis of solvency margin, and there is a surplus demand in excess of the capacity which
enables a new company to achieve its purposes.
3.
Setting up of a new company leads to an increase of total retention in the market; taking
into account the technical considerations.
4.
The new companies shall introduce new insurance covers.
Sector or subsector
Limitations
access
1. Life, health, personal (1)
accident
(2)
(3)
•
•
on
market Limitations Additional
on national commitments
treatment
None
(1)
None
(2)
Foreign and joint venture (3)
companies are allowed only
to carry on business in free
zones, provided that their
activities shall be confined to
the transactions carried out
in convertible currencies.
No maximum limits required
on the foreign shareholding
in free zones
Economic needs test shall
apply
to
the
inland
commercial presence (other
than in free zones) according
to the criteria as stipulated in
the horizontal section.
None
None
None
Sector
subsector
or Limitations on market access
•
•
•
•
•
Relaxation of economic needs test
shall be in 2000 for life, health &
personal accident business
Foreign insurance companies’
branches and agencies are not
allowed.
Foreign capital equity shall not
exceed 49% of the total capital
required for the company (other
than in free zones) up to 31
December 1999.
As of 1 January 2000, foreign
capital equity shall be up to 51% of
the total capital required for the
company (other than in free zones).
Legal cessions of the total
transactions must be ceded to
Egyptian
Reinsurance
Co.
according to the percentages to be
Limitations Additional
on national commitments
treatment
Sector
subsector
or Limitations on market access
•
Limitations
national
treatment
on Additional
commitments
decided by the supervisory
authority and 5% of the company’s
treaties to African Reinsurance Co.
(4) Qualified non-Egyptian directors are (4) A non-Egyptian
allowed for a five-year term and
director must
may be renewed.
Their
have at least
appointment and renewal is subject
two Egyptian
to the approval of the Supervisory
understudies.
Authority.
2. Non-life insurance
(1)
(2)
(3)
Unbound
•
None
•
Foreign
and
joint
venture
companies are allowed to carry on •
business in free zones, provided
that their activities shall be
confined to the transactions carried
out in convertible currencies.
Unbound
None
None
Sector
subsector
or Limitations on market access
•
•
•
•
•
•
No maximum limits required on the
foreign shareholding in free zones.
Economic needs test shall apply to the
inland commercial presence (other than
in free zones) according to the criteria
as stipulated in the horizontal section.
Relaxation of economic needs test shall
be in 2002 for non-life business.
Foreign capital equity shall not exceed
49% of the total capital required for the
company (other than in free zones) up
to 31 December 2002.
As of 1 January 2003, foreign capital
equity shall be up to 51% of the total
capital required for the company (other
than in free zones).
Foreign insurance companies’ branches
and agencies are not allowed.
Limitations Additional
on national commitments
treatment
Sector
or Limitations on market access
subsector
•
•
3. Reinsurance (1)
and retrocession (2)
(3)
Legal cessions of the total transactions must
be ceded to Egyptian Reinsurance Co.
according to the percentages to be decided
by the supervisory authority and 5% of the
company’s treaties to African Reinsurance
Co.
(4) Qualified non-Egyptian directors are
allowed for a five-year term and may be
renewed. Their appointment and renewal is
subject to the approval of the Supervisory
Authority.
Limitations Additional
on national commitments
treatment
(4)
None
None
Foreign and joint venture companies are
allowed to carry on business in free zones •
and inland, and in the case of carrying on •
their activities in free zones, their •
transactions shall be confined to be carried
out in convertible currencies.
A nonEgyptian
director
must
have at
least two
Egyptian
understud
ies.
None
None
None
Sector
or Limitations on market access
subsector
Limitations Additional
on national commitments
treatment
No maximum limits required on the foreign
shareholding in free zones or inland.
•
Foreign reinsurance companies’ branches
and agencies are not allowed.
•
Insurance and reinsurance companies are not
allowed to deal with reinsurers not listed in
the supervisory authority list.
•
5% of the company’s treaties must be ceded
to African Reinsurance Co.
(4) None
(4) None
4.
Auxiliary
services
other
than
intermediation:
a.
Actuarial
(1)
services
(2)
Unbound
Unbound
•
•
Unbound
Unbound
Sector
or Limitations on market access
subsector
Limitations Additional
on national commitments
treatment
(3) Foreign service supplier must be authorized to (3) None
perform this profession from a competent
authority in his home country and registered
at the Egyptian register for that purpose
(4) None
(4) None
b. Consultancy
(risk assessment (1)
and
risk (2)
management
(3)
only)
(4)
c.
Loss
assessment
None
None
Foreign service supplier must be authorized
to perform this profession from a competent
authority in his home country and registered
at the Egyptian register for that purpose
None
(1) Unbound
(2) Unbound
•
•
•
None
None
None
•
None
(1) Unbound
(2) Unbound
Sector
or Limitations on market access
subsector
Limitations Additional
on national commitments
treatment
(3) Foreign service supplier must be authorized to (3) None
perform this profession from a competent
authority in his home country and registered
at the Egyptian register for that purpose
(4) None
(4) None
d. Iaison offices
(1)
(2)
(3)
(4)
5. Intermediation
None
•
None
•
Commercial presence is bound only for
•
public relations and market research.
•
None
None
None
None
None
(1) Bound only for life insurance and reinsurance
(1) None
services.
(2) Bound only for life insurance and reinsurance (2) None
services.
(3) Unbound
(3) Unbound
(4) Unbound
(4) Unbound
The Effects of Liberalization
1.
2.
3.
4.
5.
6.
The Foreign owned shares in 2002/2003 was 12.3% of the insurance market
capitals and 54.6% of the private sector capitals
Their share of the life insurance premium was 23% of the whole market and
73.1% of private sector
Their share of the non-life insurance premium was 10.8% of the whole
market and 42% of private sector
There are 8 foreign managing directors leading 8 insurance companies
There are another 8 foreign chairmen and deputy chairmen
Two foreign actuaries and 2 loss adjusters obtained licenses and registered
in EISA’s register