Egypt - Life ins. industry in Egypt affected by COVID-19
Thursday, 07 09 2020, Category: Insurance and Reinsurance, Country: Egypt
Egypt's insurance industry is impacted by COVID-19, though most of the claims cover many diseases including the pandemic.
"The novel coronavirus has appeared in Egypt since mid-February, which means the insurance companies have worked the whole second quarter of 2020 amid the virus concerns," said Alaa al-Zoheiry, chairman of the Insurance Federation of Egypt.
Although some Egyptian insurance companies claim the coverage of the pandemics such as coronavirus, the rate of signing insurance documents since February has declined by 10 to 15 percent compared to the same period in the previous year.
Driven by the difficult living conditions that the citizens have been experiencing lately, "the rate of paying the installments of the claims, which have been signed before the outbreak of the virus, has also been impacted," he explained.
Seeking life insurance relies on the ability to save money, al-Zoheiry pointed out, noting that in the time of crisis, people would give the priority to ensure food and medicine, and buying insurance certificate would come last in the list of priorities.
"The insurance industry is the real mirror of the economy and an international economic stagnation is predicted while the world economies are suffering difficult times," he said.
Insurers carefully consider the potential impact of the virus on their short-term and long-term financial outlooks, he said, adding that the claims will likely be limited to certain classes of business.
"People have more tendency to save their money in the bank and are reluctant to pay for insurance or any sort of investment because they fear that they might lose their jobs and couldn't fulfill their dues," he added.
According to the Insurance Information Institute's first quarter "Global macro outlook," the COVID-19's impact on global growth and the insurance industry is likely deeper than the current consensus and could last into the third quarter of 2020 and beyond.
Mohamed Abdel Raziq, a consultant in Tharwa Egypt Company, agreed with the insurance expert, saying that COVID-19 has hit hard the insurance sector revenues, due to the decline of the financial resources of the clients.