New products and premium growth bolster the sector

The three years since the 2011 revolution have proven to be profitable for most of Egypt’s insurers, making it one of the few sectors to overcome the country’s economic malaise. Although insurers have been faced with substantial payouts as a result of civil disturbances, premiums have grown and new products have been developed to meet the increasing demand for cover. However, by most measures, Egypt’s insurance market remains small relative to those in the developed world and state players continue to dominate the arena.


The state-owned insurance company is known as Misr Insurance Holding Company. It was formed in 2006 and further subdivided into Misr Life and Misr Insurance (offering non-life products) to comply with a 2008 law requiring life and non-life insurance companies to operate as separate entities. The Egyptian government’s financial year runs from July 1 to June 30, and such is the state’s traditional dominance of the sector that all insurance companies’ fiscal years still comply with the government reporting periods.

Sector Structure

Since June 1998, when Egypt lifted the 49% ceiling on foreign investment in insurance companies, 100% foreign participation has been allowed. The 30 companies currently operating in the country include those that are fully owned by Egyptians, companies which are fully foreign-owned as well as joint ventures.

Insurers operating separate life and non-life companies in Egypt include Delta, ACE, Allianz and AROPE. In the takaful (Islamic insurance) sector, where life insurers are called family insurance companies, there are eight firms, including Japanese firm Tokio Marine Egypt, which in October 2013 acquired Nile General and rebranded as two firms. Other insurers in the non-life sector include Suez Canal Insurance, ElMohandes, AIG, Royal Insurance, BUPA and Arab Misr Insurance Group. Life companies include Met Life, Commercial International Life Insurance Company, NSGB Life Insurance and Alico Egypt. There is also Co-operative Insurance Society, (CIS) and the Export Guarantee Company of Egypt.


Insurance companies collected LE13bn ($1.85bn) in premiums in the 2012/13 financial year, an increase of 18% from LE11bn ($1.56bn) in 2011/12, according to an Egyptian Financial Supervisory Authority (EFSA) spokesman quoted by Ahram, a leading local newspaper.

Company records show that of this total, state-owned insurers Misr Life and Misr Insurance collected LE6.2bn ($880.4m) in premiums in 2012/13, up 16.4% from the total of LE5.34bn ($758.28m) they collected in the previous year. This means the two state insurers collected some 49% of all premiums in the year ending June 2013.

Regional Comparisons

Although Egypt had a population of around 87.5m as of late 2014, according to figures from the Central Agency for Public Mobilisation and Statistics (CAPMAS), the level of insurance penetration is low on a global scale and modest when compared to other economies in both Africa and the Arab world.

According to Swiss Re’s report “World Insurance in 2012”, Egypt’s total premiums in 2012 were $1.82bn, up from $1.71bn the previous year and equal to a 6% increase. The 2012 figure compared to $1.25bn in Algeria and $2.86bn in Morocco, both countries with populations that are less than half of Egypt’s. The total value of life premiums in Egypt increased by 6% from $740m in 2011 to $785m in 2012, placing it third on the continent behind South Africa and Morocco as well as third in the Arab world after the UAE and Morocco.

Non-life premiums also grew by 6% from $973m in 2011 to $1.03bn in 2012. In the non-life sector, Egypt was sixth on the continent behind South Africa, Morocco, Nigeria, Algeria and Angola, and sixth in the Arab world behind the UAE, Saudi Arabia, Qatar, Morocco and Algeria. In terms of insurance density, Egyptians spent just $21.70 per capita on insurance as a whole, placing it ninth among 10 countries studied in Africa. Its rank is the same for non-life insurance with premiums of $12.30 per capita; only Nigeria ranks lower in each case. The $9.40 Egyptians spent per head on life insurance placed it seventh out of 10 countries studied in Africa, with Angolans, Algerians and Nigerians all spending less per head on life cover. Among countries in the Arab world, Egypt is bottom of the list in terms of overall spending and non-life spending, but higher than Algeria and Saudi Arabia in life cover, with Saudis spending $8.20 and Algerians just $2.40 on life cover per capita. When insurance penetration as a percentage of GDP is considered, Egyptians are spending just 0.73% overall, with this breaking down into 0.315% on life insurance and 0.415% on non-life.


Egypt’s insurance companies paid out LE8bn ($1.14bn) in claims in 2012/13 compared to LE7.79bn ($1.11bn) in 2011/12 and LE5.87bn ($833.54m) in 2010/11, representing a 36% increase in payouts over the two-year period. According to an EFSA spokesman, there were outstanding claims worth LE4.8bn ($681.6m) at the end of the 2012/13 financial year, which ended just as the government of Mohammed Morsi was overthrown.

The two state-owned companies, Misr Life and Misr Insurance, bucked the trend and saw their payouts in 2012/13 fall by 20% from the previous year. The two firms paid claims worth LE4.7bn ($667.4m) in 2011/12, followed by LE3.76bn ($533.92m) in 2012/13. That meant the state firms’ share of total claims payments amounted to 47% of the total in 2012/13, down from 60% of all payouts in 2011/12. However, it should be noted that the impact that the street violence and damage to property, which took place in the months after the overthrow, had on insurance business will not be quantified until the 2013/14 results are published.


In December 2013, the EFSA announced that the asset value of the insurance sector in Egypt had grown by LE5bn ($710m) in 2012/13, or 10.9%, from LE43bn ($6.11bn) in June 2012 to LE487bn ($69.15bn) in June 2013. The companies’ collective investment value increased by LE4bn ($568m) from LE38bn ($5.4bn) to LE42bn ($5.96bn), a growth rate of 9.4% over the same period. At the same time, the two state insurance companies, Misr Life and Misr Insurance, saw their joint investments grow by 5.35% from LE26.2bn ($3.72bn) in 2011/12 to LE27.6bn ($3.92bn) in 2012/13. That means the two state insurers’ investments comprised 66% of the total investment value of the Egyptian insurance sector for that year.

Regulations dictate that Egyptian insurance firms can only make investments within the country and, as political turbulence has affected the economy and forced the government to sell debt securities, the two state-owned insurance companies have seized on Treasury bills as a way to enhance their investment portfolios. In 2010/11 the two companies had LE3.8bn ($539.6m) invested in T-bills, but this figure jumped by 106% to LE7.9bn ($1.12bn) in 2011/12 and by a further 16.75% in 2012/13, by which time the two state insurers were holding LE9.2bn ($1.31bn) in Treasury Bills.


The sector has remained profitable, despite the political upheaval of the past few years, but if state insurer Misr Life’s record is considered, it suggests its fortunes have fluctuated. Misr Life’s net profit at the end of June 2010 was LE21.9m ($3.11m), but it fell in the year of the January 25 revolution to LE18.8m ($2.67m) in June 2011. It rallied to reach LE40.7m ($5.78m) in June of the following year and increased again to LE70.9m ($10.07m) by the end of June 2013, the eve of the government overthrow, which represents an increase of some 277% in net profits over a period of three years.

EGX: Just two of the country’s private insurance companies are listed on the Egyptian Exchange (EGX), which has a separate category for “Financial Services Other Than Banks”, and, as a result, more recent indicators of their performance have been made public. Delta Insurance and Mohandes Insurance both recorded net profits for the nine months ending in March 31, 2014. Delta’s profits for the period were LE19.4m ($2.75m), down 9.8% on the same period a year before, when its profits were LE21.5m ($3.05m). Mohandes Insurance, on the other hand, reported a 23% year-on-year (y-o-y) increase in net profit for the nine-month period, from LE14.1m ($2m) to LE17.3m ($2.46m). Mohandes Insurance also made an announcement in May 2014 that it had completed all of the necessary steps needed to create a separate life insurance business. According to EGX data, Delta, in which the Egyptian Kuwait Holding Company owns a stake of 20.5%, has a market capitalisation of LE149.4m ($21.21m), while Mohandes’s market capitalisation is LE112.9m ($16.03m).


In a report on Egypt’s insurance sector published in early 2014, Business Monitor International predicted growth in all segments. It expected to see total premiums rise by around 6.1% to $2.6bn, life premiums increasing by 7.1% to $1.5bn and nonlife premiums up by 4.7% to $1.1bn. It forecast that motor insurance premiums would rise by a modest 1.5% to $389m, but property premiums will see a more substantial 9.9% increase to $181m.

However, predicting total claims for the 2013/14 period is considerably more problematic. Demonstrations began two days before the end of the financial year, but the brunt of the violence that ensued was to be felt over the following 12 months. This impact is difficult to quantify, though it is possible that losses would be mitigated by increased take-up of cover prompted by concerns over the violence and disorder that characterised the period. “If you feel insecure and at risk, then you will feel you should have someone to help with insurance, because it is all about risk management,” Alaa El Zoheiry, managing director of Arab Misr Insurance Group (gig), part of the Gulf Insurance Group, told OBG.

El Zoheiry further explained that despite the political instability of the period, gig’s financial performance improved in the nine months starting on July 1, 2013 and ending on March 31, 2014, compared to the same period a year before. Gross premiums were up LE11.1m ($1.58m) to LE27.8m ($3.95m); technical profit from underwriting increased from LE9.1m ($1.29m) to LE19.7m ($2.8m); and net profit for the three quarters came in at LE51.5m ($7.31m), a 26% increase on the LE41m ($5.82m) recorded in the same nine-month period in the previous year. Meanwhile, the company’s payouts declined by 18%, from LE123m ($17.47m) in the period from July 2012 to March 2013 to LE101m ($14.34m) in the same period the following year.

Political Violence

Corporate clients account for 75% of gig’s customer base. For some of these businesses and government-owned entities, new products designed in response to and introduced to the market after the January 2011 revolution have been attractive. According to gig’s El Zoheiry, insurers paid out LE1.2bn ($170.4m) for claims related to January 28, 29 and 30 that year alone, but there was a debate among providers and throughout the insurance community over whether any of the political violence claims should be paid at all.

Many property insurance policies include cover for damage caused in strikes, riots and civil commotion (SRCC), but draw the line at compensating for the effects of a revolution. For the Insurance Federation of Egypt (IFE), its members’ decisions to honour their commitments in that troubled year has boosted the reputation of the insurance sector as a whole and has helped potential customers and existing customers see the benefits of being insured. “Before the revolution we didn’t have any violence or unrest, but after the revolution there has been demand for SRCC cover, as well as demand for political violence cover,” Abdel Raouf Kotb, the chairman of the IFE, told OBG. “Demand for this kind of cover in the last 12 months has come particularly from the corporate sector. Political violence coverage is very widespread; however, there have not been many claims.”

Car Crime Down

One outcome of the political change that took place in July 2013 is that the army and police have been on the streets in greater numbers than under the previous regime. The increased physical presence of law enforcement has led to a drop in some property crimes. “As far as car thefts are concerned, I’m not sure they are as prevalent now as they were, because security has improved,” Mohamed Maait, deputy chairman of the Egyptian Financial Supervisory Authority (EFSA), told OBG.

Tourism Insurance

According to the May 2014 statistics bulletin issued by the central bank, the number of tourists arriving in Egypt in the 10 months from June 2013 to March 2014 was just 6.5m, compared to 13.75m in 12 months in 2009/10. Consequently, the insurance sector has been working to improve cover for travellers.

In January 2014, EFSA approved policies offering individual tourists visiting Egypt coverage worth $50,000 in the event of death or disability. The EFSA response followed an agreement between the Egyptian Tourism Chamber and the IFE, which believes all tourism companies operating in the country should comply with the new product. “The IFE has worked with a union of travel companies and has finalised a policy, but it would need a ministerial decree before it is introduced,” Mohamed Maait, the deputy chairman of EFSA, told OBG.

Antiques & Museums

EFSA has been encouraging firms to offer protection for museums housing the numerous antiquities and ancient treasures that help attract tourists to Egypt. In May 2014, the Egyptian government signed a memorandum of understanding with the Antiquities Coalition, an American organisation that raises awareness and combats the theft of ancient artefacts and monuments. Deborah Lehr, the Antiquities Coalition’s chairperson, estimates that since the January 25 revolution between $3bn and $6bn worth of antiquities have been stolen or destroyed in Egypt. The Antiquities Coalition has produced satellite imagery to show the extent of the looting that has taken place at some archaeological sites, aiding in the recovery of some 900 of the 1000 items stolen from the Malawi Museum in Mina in 2013.


The growing popularity of sharia-compliant insurance products has not been adversely affected by the unrest and political changes of recent years. IFE Chairman Kotb is also the deputy chairman and managing director of Egyptian Saudi Insurance House, the first firm to offer takaful insurance in Egypt in 2003 and the only one to do so until 2008. There are currently eight companies competing in Egypt’s takaful market, offering both non-life and life, or family takaful products, as they are known.

According to El Raouf Kotb, there are good reasons for the increasing popularity of takaful products in the country. “Customers are more relaxed with takaful because they know the companies will comply with sharia law and they don’t like to deal with commercial insurance companies,” Kotb told OBG. GCC companies such as Wefaq, Arab Orient and Egyptian Saudi Insurance House hold stakes in Egypt for the takaful segment.

In 2013 and 2014, insurers from Japan and Lebanon entered the Egyptian takaful market, acquiring Nile General and Solidarity Family Takaful, respectively, suggesting that international investors see potential in the growth in popularity of takaful offerings, but also in the scope for deeper penetration of the Egyptian insurance market.


Insurance companies in Egypt are eager to work with the sector’s regulator, EFSA, to push through reforms to foster growth in the industry. The sheer size of the country’s population suggests there is great potential to be tapped, but real reform has had to take a back seat since 2011 due to economic and political instability. Although the insurance sector has fared better than most others in the turmoil that has engulfed Egypt, and has even seen its profits rise, industry players are hoping a period of greater stability will yield even better results and help to stimulate growth, expansion and profitability.

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The Report: Egypt 2014

Insurance chapter from The Report: Egypt 2014

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