Egypt s insurance industry can be generally described by being underdeveloped with a big room for significant future growth. In recent years, annual insurance premium growth averaged 10%, compared with average global growth of about 2%.
The sectors growth has been traditionally hampered by a lack of public appreciation for the significance of insurance and a general reservation within society regarding the religious probity of insurance. Another factor that limited the operations of insurance companies is the heavy state dominance in the sector, a case which limited the sophistication and variation of products compared to those in other developed markets.
However, the picture is expected to brighten up during the coming period, with the countrys transition towards a market driven economy and the encouragement of private participation that will likely lead to an increasingly liberal and sophisticated insurance industry. Ministry of Economy, Youssef Boutrous Ghali told public sector insurance providers in early 2000 that the liberalization of the insurance and the breaking down of the long-established state monopoly could lift domestic savings from todays 19% of GDP to as high as 30%. This in turn could bring the insurance premiums to at least 4% of GDP, compared to its present rate of less than 1% of GDP.
Overall, the sector consists of fourteen registered insurance companies, one Reinsurance Company, three insurance pools and 591 private company funds, mainly operating in life and retirement insurance activities. Of the total fourteen companies, three are state-owned insurance companies and one is a state- owned reinsurance company. The remaining eleven private companies are operating in the local market and the free zones.
The sector is almost evenly split between life and non-life insurance, where non-life insurance companies account for 48% of total direct premiums, life private funds 33% and life insurance companies 19%. The three public insurance companies occupy 90% of all life business and 75% of non-life business.
In preparation for the privatization of the 4 public companies, Morgan Stanley & Flemings have finished the assessment of the assets of the four companies.
Foreign operators in the sector include: American Insurance Group (AIG) of the US which became a major player in both the Egyptian general and life insurance, British Royal and Sun Alliance, the US based Marsh& McLennan which opened a representative office, Legal & General of the UK operating in the life insurance, in addition to other major foreign insurance companies.
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