Egypt – Dollar currency weighs heavily on insurers
Wednesday, 03 02 2016, Category: Insurance and Reinsurance, Country: Egypt
The insurance sector entered into confrontation with international reinsurance companies given the difficulty of securing USD currency to settle the due amounts to reinsurers, which exceeded the threshold of 70% of total risks written. Additionally the central bank does not consider the insurance industry as a priority compared to food, medicine and oil products.
The General Manager of Reinsurance at Egyptian Takaful (Property and Liability) Company Mr. Hamed Mahmoud said that most insurance companies face problems in securing the required USD amounts to settle amounts due to reinsurance companies, indicating that is not possible to revert to the parallel currency market since such amounts cannot be deposited at banks given the latest decisions of the central bank which set the monthly deposit amount limits for individuals and enterprises.
He added that a number or reinsurance companies are aware of this situation especially given that that the crisis is related to the overall Egyptian economy and not only the insurance sector. However, they agreed with insurance companies to settle premiums gradually provided the official prevalent exchange rate dated the treaty inception is used.
Source: Al Mal News