Egypt – Insurers not allowed to reinsure locally
Thursday, 11 10 2016, Category: Insurance and Reinsurance, Country: Egypt
“Al Mal News” was informed that a number of reinsurance companies in foreign markets compelled Egyptian cedants not to cede locally or practice what is called co-insurance. Additionally, in case of necessity such activities should be fully disclosed.
A senior insurance official said that reinsurance treaties during past year did not include this condition, so treaties were previously called “blind treaties”, which previously allowed insurers to reinsure locally in order to increase the retention of the market.
He indicated in statements to “Al Mal news”, that insurers have 2 negative options. They could either stop dealing with reinsures that impose such conditions, which will lead large companies to exit the Egyptian market. And they could alternatively comply with the conditions and retain the risk internally if the reinsurer refuses to provide the full cover, which will threaten the final position of insurers in case the risk materializes.
Source: Al Mal News