Egypt's Financial Regulatory Authority (FRA) has on Wednesday for the first time allowed life insurance companies to invest directly in gold and other precious metals. The move is aimed at broadening investment options, boosting returns, and attracting more savings into the insurance sector amid rising interest in tangible assets. Under Decision No. 228 of 2025, life insurers and fund accumulation operations can allocate part of their investment-linked premiums or savings contracts towards gold, subject to prior regulatory approval and strict disclosure requirements. The new framework represents a significant expansion of investment avenues within Egypt's growing non-banking financial sector. The decision marks "a strategic shift in Egypt's savings and investment landscape," FRA Chairman Mohamed Farid said in a statement. "We are balancing innovation with risk management, while ensuring full transparency and protection for policyholders." The move comes as regulators push to diversify insurance portfolios and strengthen returns for policyholders. Under the new rules, insurers must secure explicit consent from clients before directing any portion of premiums into metal investments and must provide clear, written, and visual explanations of potential risks and rewards. The regulation also imposes tight governance standards, including dealing only with FRA-registered entities, maintaining segregated holdings by supplier, and engaging licensed third-party firms to independently value the metals portfolio. Insurers must disclose investment performance in their quarterly and annual reports, detailing returns, costs, and metal allocations. The framework aligns with Egypt's Unified Insurance Law No. 155 of 2024, which aims to enhance transparency, accountability, and diversification across the financial sector. The FRA has issued more than 40 regulatory measures since the law's adoption to strengthen the insurance market and deepen financial inclusion. Recent initiatives include requiring insurers and private funds to allocate portions of their assets to local equity funds to support capital market growth. Egypt's move follows a broader global trend of insurers seeking to hedge inflation and currency volatility through alternative and real asset investments. Gold, traditionally seen as a safe haven, has gained renewed appeal amid persistent macroeconomic uncertainty. Attribution: Amwal Al Ghad English
