Boston, MA -- (SBWIRE) -- 12/02/2014 -- It may well be that 2014 is seen as a landmark year in which Egypt's resilient insurance sector moved decisively onto a trajectory of high annual growth in premiums. The inconvenient ban on bancassurance came to an end at the beginning of 2014. The regulator has clearly indicated its intention to promote a number of positive reforms. These reforms include a major modernisation of the laws governing the insurance sector in Egypt and the possible introduction of compulsory lines (e.g. for expatriate Egyptians). The insurers themselves have been innovative, developing products that relate to the political violence that has been widespread. Takaful appears to be growing rapidly, albeit from a very low base.

The massive expansion of the capacity of the Suez Canal, which has been funded by the successful issuance of USD8.5bn in investment certificates in September 2014, will undoubtedly provide opportunities for the property & casualty insurers. Nevertheless, in a country where only 6% of the population actually use insurance, it is clear that there are substantial challenges yet to be overcome. For now we are cautiously optimistic, looking for growth in property insurance premiums of around 20% per annum. In other non-life lines and the life segment, the rate of expansion will likely be in mid-to-high single digits. We concede, though, that Egypt is a country where we may have to revise our forecasts by a significant amount prior to mid-2015: for now, we think that it is much more likely that we will be lifting the forecasts than reducing them.

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For a very long time, Egypt's insurance sector compared unfavourably with those of other countries that are monitored by BMI. Key metrics such as penetration (premiums as a percentage of GDP) and density (premiums per capita) were at (very) low levels. Growth in premiums was consistently pedestrian. Regulatory change moved at glacial pace: some official decisions, such as the (now ended) ban on bancassurance,...

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