Egyptian Insurance Sector Awaits Political Stability To Recover: Experts

Experts said insurance sector will be witnessing a decline and turmoil in case of the eruption of riots and protests after the results of the presidential elections. Besides, they affirmed that the Islamist rival victory would not harm the sector.

Tarek Gabr, head of compensations department at Royal Insurance Company, said insurance companies would incur substantial damages if riots and turmoil erupted after the presidential elections results, especially that extra insurance coverage against riots and civil turmoil risks were extended to most insurance policies. The financial results of insurance companies in the current fiscal year will not be harmed by the turmoil as the year will be ended by July, Gabr noted.

The election victory of Muslim Brotherhood’s Dr. Mohamed Morsi will not affect takaful (Islamic insurance) sector. Increasing the number of takaful companies will be through enacting rules regulating Islamic finance, Gabr added.

Ahmed Naguib, managing director at Promise Insurance Brokerage Company, said political stability will bring economic recovery. The election victory of Mubarak’s aide will be followed by protests and sit-ins. This will accordingly affect negatively security situation. Consequently, insurance sector will decline, Naguib concluded.

Meanwhile, the low prices offered by new insurance companies together with the high volume of compensations harm  the sector, Naguib said, calling on Egyptian Financial Supervisory Authority and Insurance Federation of Egypt to contribute in boosting the sector.

Regarding the impact of the Islamists’ rise to power on takaful insurance sector, Naguib said the sector will not be affected by the ideology of the president.