Egypt Insurance Market 2016

Market Participants  

Summary and Trends

The Egyptian market in 2016 comprised 19 general non-life insurance companies, plus an export credit insurer and a co-operative insurance society.

The largest insurer remains the state-owned company Misr, which dominates the market in all classes. It has a sister company Misr Life, also state-owned. Other non-life insurers are a mix of locally owned companies, including takaful insurers and foreign insurers. Some of these have capital from other Arab states and others are part of major international insurance groups.

Ten non-life insurers, Egyptian, foreign and/or takaful, have associated life companies. All insurers are joint stock companies with the exception of one co-operative.
Takaful companies account for most of the recent entrants in both the life and the non-life sectors and there are now five non-life takaful companies, with a combined market share of over 10%. They have generally been growing faster than the market average, albeit from small bases, and compete aggressively on price rather than their takaful status.

There are no true financial conglomerates in the market but several banks have shareholdings or historic links with insurers, the most important in non-life being Misr Bank with Misr and Egyptian Saudi Bank in Egyptian Saudi Insurance. Whilst banks have shareholdings in local insurance companies and vice versa, there is no integration of financial services groups in Egypt.

Gross Written Premium
   2012 2013 2014 2015 2016
Life insurance  4,483 5,267 6,154 7,339 8,324
Non-life insurance  6,088 6,953 7,547 8,117 9,009
Total  10,571 12,220 13,701 15,456 17,333
Breakdown of Non Life by LOBs
  2011 2012 2013 2014 2015 2016 % of total
Property 764,838 890,076 1,047,589 1,215,697 1,353,526 1,447,700 16.70%
Cargo 269,380 286,315 306,080 334,072 320,825 322,942 4.00%
Inland 61,335 86,350 103,696 124,146 121,860 122,961 1.50%
Marine Hull 158,312 152,663 171,081 182,346 186,174 191,954 2.30%
Aviation 199,778 199,713 193,775 146,373 153,470 164,091 1.90%
Motor OD 479,451 529,557 573,305 727,230 745,021 2,042,298 9.20%
Motor TPL  546,486 626,540 815,928 735,889 774,695 912,325 9.50%
Engineering 608,691 640,544 697,023 783,305 820,650 870,728 10.10%
Energy 1,442,394 1,362,845 1,425,157 1,571,976 1,796,167 655,511 22.10%
Accident 618,410 729,542 884,444 791,488 663,875 890,430 8.20%
Medical 506,349 584,753 735,446 934,098 1,181,715 1,388,453 14.60%
  5,655,424 6,088,898 6,953,524 7,546,620 8,117,978 9,009,393 100.00%
Market Concentration in P&C
The table below shows the aggregate market share in percentages of the top five and top 10 non-life companies in recent years. In 2016 the market leader Misr alone had almost 49% of the non-life market.
Market Segment 2011 2012 2013 2014 2015 2016
 Top 5 companies  75.71 73.98 73.84 73.15 72.29 71.2
 Top 10 companies  92.22 91.14 90.35 90.06 89.45 87.74

Market Concentration in Life

The table below shows the aggregate market share in percentages of the top five and top 10 life companies in recent years. In 2016 the market leaders Misr (34%), Metlife (17%), Allianz (16%) & CIL (13%) dominates 80% of life Market.
Market Segment 2015 2016
 Top 5 companies  86.7 85.3
 Top 10 companies  98.7 98.4

A few pools exist and include the following:         
 -   Personal accident pool for passengers travelling on the railway/metro or roads.
 -   Decennial risks pool
 -   Nuclear risks pool.

These pools, membership of which is voluntary, are run by the Insurance Federation of Egypt with insurers and the supervisory authority. Their boards set rates using actuarial information and one participating insurer is usually charged with administration, including quarterly accounts to all members. These are understood to retain 30% of premiums written for administration costs, passing the remainder to the pool.

Companies agree their participation periodically, say every three years, and this is not necessarily proportionate to their respective premiums or assets.

The personal accident pool for passengers has paid compensation to the victims of the 2012 Asyut and 2013 Badrasheen train disasters as well as to other victims. The total cost of all these accidents reached EGP 80.4mn (USD 11.65mn).

Decennial insurance business is written by many companies in the market and ceded to the market decennial pool after retaining 30% for administration costs. Companies receive a share of the premiums and losses in accordance with their shares in the pool, which are agreed periodically.

The nuclear insurance pool has been inactive since 2002 but with construction of the next generation of nuclear plants, it is felt the pool will be revived to meet this eventuality.

There has been some talk of a natural perils pool in response to floods in the Sinai region and the Insurance Federation of Egypt (IFE) has announced that it is still under active consideration. According to new anti-terrorism legislation Egypt's military and police forces are to benefit from compulsory insurance cover against death/disability (total/partial) resulting from terrorism. EFSA and the IFE are currently carrying out an actuarial analysis and working with the relevant government ministries to decide coverage and premiums. Initially, it is planned to set up a pooling arrangement for this business.

Insurance Association

Law No 118 of 2008 requires all regulated life, non-life and reinsurance companies are members of the insurance association, the Insurance Federation of Egypt (IFE). The general assembly of the IFE comprises over 30 members, including the chairman of EFSA. The IFE's published objectives are to: raise the level of the insurance industry in Egypt.

 -   Monitor competition and foster relationships between companies, the IFE and EFSA.
 -   Examine the technical bases of pricing and compensation.
 -   Promote improved professional standards, training and complaint handling.

The IFE also liaises closely with the supervisory authority in various areas, including complaints handling, to ensure the efficient management of the insurance industry in Egypt. The federation is actively involved in training and, in co-operation with EFSA, has financed actuarial science studies at two universities in Cairo.

The chairman of the IFE is Mr Abdel-Raouf Kotb.

A number of technical committees are engaged in studying all the main classes of business, reviewing causes of loss and insurance policy wordings, to assist the company market and promote improved professional standards. Their work may also include recommendations on covers and rates. The federation's annually approved budget is funded by the member companies in proportion to their premium income. They are also committed to cover any deficit in its operations.