Egypt – Negative implications of dollar appreciation on reinsurance
Thursday, 11 05 2015, Category: Insurance and Reinsurance, Country: Egypt
A number of insurance experts in the Egyptian market confirmed that the depreciation of the Egyptian Pound against the US Dollar will have implications on the reinsurance treaties of Egyptian insurance companies, indicating that this will have positive and negative implications on the insurance sector where the appreciation of the dollar will limit the black market for the currency in Egypt.
Mr. Mohamed Ali Abd El. Mawla, the Technical General Manager of Wethaq Takaful said that Egyptian Pound depreciation for the third time in the current year will impact insurance and the currency market. He said that the depreciation of the Egyptian Pound against the Dollar means that the value of the US Dollar increases so that currency will be needed to a large extent and will have implications on imports and exports.
Mr. Abd El Mawla clarified that the problem lies in the currency transfer where insurers deal in a foreign currency (Dollar) with external parties. So some companies face problems in ceding reinsurance in USD where the EGP depreciation increases this problem. However, insurance companies use USD as a usual currency and usually do their best to secure this currency.
Source: Al Sahm News