Insurance becomes Animated at times of Crises – Business Results not affected by Political Turmoil

We acquire 19.9% of the Market Share for Non-Life Insurance –3.7% for Life Insurance

Volume of Allianz’s Non-Life and Life Insurance Premiums is EGP 320 million in 9 Months

Written by: Islam Abdel Hamid and Alzahraa Mustafa

Mohamed Mahran, General Manager for Allianz Insurance Egypt, has clarified that the insurance sector is playing a significant and pivotal role in sustaining the Egyptian economy through lessening the risks for the investors, in an attempt to encourage them to enter and expand in the Egyptian market. It also protects the assets against any mishaps, besides contributing to many new ventures, and having the greatest part in the governmental debt in order to support the national economy.

Mahran in an exclusive interview with Amwal Al-Ghad explained that insurance becomes active during the time of crises and increases awareness of it because citizens and companies take up insurance to face the potential risks. Although the decline of the economic activities has been affected by the political incidents, we were able to attain good business results that raised the volume of premiums in both sectors of non-life and life insurance to EGP 320 million by the end of the third quarter of the fiscal year. Consequently, the company acquired 19.9% of the non-life insurance market share, and 3.7% of life insurance. 

How do you see the insurance sector in the Egyptian market at the present time amid the political and economic turmoil?

Insurance is a pillar of the economy. It is positively affected in flourishing times and negatively at times of crises. However, the turnout on insurance clearly appears during the times of crises, as the clients want to secure their properties in case of increasing the potential risks like fire, robbery or political violence.

These risks could be the incentive factor for buying insurance documents. Therefore, in the current period individuals tend to take out insurance to protect their properties.

How can the insurance sector assist in reviving the Egyptian economy in the coming period?

The insurance sector has two principal roles and a secondary one in strengthening the economy. The first key role is represented in protecting assets in case of accidents occurring, which could help the investor and financial institutions to lessen the risks.

The second role includes participation in supporting the investment, as the insurance companies gather financial sums, and then investing them via participating in different ventures or in the government debt.

On the other hand, the secondary role of the insurance companies is represented in reviving the economy via improving the economic environment or what we call controlling the risks and avoiding them.

To what extent are the reinsurance agreements impacted by the current incidents?

The Egyptian insurance market has recently experienced uncertainty in performance due to the fierce competition to obtain insurance process without considering the premium’s price; leading to the decrease of prices along with the big losses, whether caused by huge blazes or various aspects of turmoil. Consequently, the insurance market paid exorbitant bills, and the reinsurance agreements were influenced as well. Then, the sector set some conditions that secure not losing so much.

What about Allianz’s stance on the reinsurance agreements amid these incidents?

The reinsurance agreements of Allianz Company have not been affected by the Egyptian economic state because it is one of the Global Allianz companies, which enjoy AA+ financial rating, and we do not face any problems in such a file. 

What are the major challenges facing the insurance companies in the Egyptian market?

The insurance companies in the Egyptian market are confronting several challenges such as the lack of technical cadres, whereas insurance is a human resources industry. It does not have machines or production lines that secure the continuity of the cadres. Therefore, the person who has the technical capabilities is valuable for the company and it has to retain him or her.

The competitive ways that some companies follow are considered as a challenge, which the insurance companies are facing during the current period because the competition is limited in certain factors or price rather than the service. This matter has influenced the reinsurance agreements, and the client’s trust in the companies. Furthermore, the companies are undergoing the lack of awareness of insurance among the Egyptian people.

What are the mechanisms that Allianz follows to overcome these challenges?

Allianz has resorted to creating a specialised academy for permanent training to permanently train cadres?? in the company in Germany or the specialised markets to assist them gain new and varied experience. This training aims to overcome the challenge of the lack of the technical cadres.

What are the company’s business results during the Q3 of the current fiscal year?

Allianz Egypt achieved EGP 320.9 million??volume of premiums during the third quarter in the fiscal year 2012-2013. Last March, Allianz’s premiums of non-life insurance hit EGP 256 million; in return for EGP 64.9 million of Allianz’s life insurance. These results are good due to the disciplines that were ratified by the second quarter of the current fiscal year. This proves that we are on the right track amid the current economic crisis.

What is the volume of the company’s market share in non-life and life sectors?

Allianz Group ranks second in the non-life insurance sector, and sixth in the life insurance sector. The company’s market share is 19.9% in non-life insurance, while life insurance reached 3.7%. The assets of the non-life companies amounted to EGP 3.123 million, in return for EGP 480 million in Allianz Egypt, which provides life insurance.

What is the volume of Global Allianz’s business results in 2012?

The Group succeeded in achieving good business results during the last year, recording €1.438 billion by the end of 2012. The volume of the Group’s profits reached € 106.4 billion in 2011, and was managed by 144,000 employers throughout the world to serve 78 million clients in 70 countries.