Egypt – Can microinsurance save small business owners?
Monday, 10 19 2020, Category: Insurance and Reinsurance, Country: Egypt
Many risks are exposed to simple people, owners of small projects and handicrafts, especially in times of crisis, which causes their work to stop and their only source of livelihood, and their suffering to meet their needs in the absence of any compensation to help them stand again To continue their economic activities, as many of the owners of these segments are unaware of the existence of insurance coverage guaranteed by the law that enables them to obtain adequate compensation in the event that they are exposed to the risks that cause the suspension of their activity, enabling them to resume this work again. Funding bodies licensed to work in providing financing for small and micro enterprises, by providing insurance coverage for this category to ensure that they obtain adequate compensation in the event of exposure to any risks or crises, which is a form of community protection for low-income people.
Micro-insurance is defined as every insurance service targeting low-income people in the areas of property and people insurance, to protect them from risks that they may be exposed to, in exchange for paying premiums commensurate with the nature of the insured risk, in the branches stipulated by law, provided that the value of the insurance policy does not exceed 200 One thousand pounds against deaths and permanent total disability, and the number of civil societies and institutions licensed to practice microfinance activity is more than 850 associations and NGOs, in addition to 4 companies currently practicing the activity, and other companies on the way to obtaining licenses, and the number of branches And offices providing service more than 1600 branches in various governorates of Egypt.
Alaa Al-Zuhairy, President of the Egyptian Insurance Federation, explained that the number of insurance policies on microfinance amounted to half a million documents to insure the beneficiaries of the financing, which amounted to 3 million beneficiaries, with a total financing approaching 23 billion pounds, adding that the document includes insurance against the dangers of default in payment. Theft, personal accidents, and total or partial disability amounting to 50 pounds annually, which is one of the means of financial inclusion in the insurance sector, and Al-Zuhairy pointed out that microinsurance has succeeded in a number of countries so that we now see countries in Africa where 50 or 60% of the population is heading For this type of insurance, which depends on microfinance, and there are now banks and institutions that cover this type of financing, which motivated insurance companies to turn to it, especially since the Financial Supervision Authority issued a decision that the micro insurance could be sold electronically, which contributes to increasing the segment dealing with This type of insurance.