Islam Azzam, Deputy Head of the Financial Regulatory Authority (FRA), announced that Egypt's microinsurance sector achieved notable growth during the 2023/2024 fiscal year. A total of 15 companies—six focused on property insurance and nine on life insurance—issued approximately 2.3 million microinsurance policies, extending coverage to 10.5 million citizens. This marks a 10.3% increase compared to the previous year. Azzam made these remarks during the Fourth Microinsurance Conference and the Tenth Regional Conference on Insurance Inclusion in Africa and the Middle East. He noted that Egypt's insurance sector is currently undergoing a significant transformation, supported by the country's national drive for financial inclusion and broader social protection for vulnerable groups. He revealed that FRA is preparing to issue a comprehensive set of new regulations. These will address consumer protection, introduce structured complaint-handling mechanisms, establish solvency requirements, and adopt a risk-based capital framework. As part of the ongoing implementation of the Unified Insurance Law, new governance rules are also in the pipeline. These will focus on promoting board diversity, increasing the representation of independent and female directors, and formalizing the internal structure of insurance entities through dedicated committees for audit, risk management, technology, and investment oversight. Azzam emphasized that microinsurance is no longer a peripheral product. It has evolved into a central pillar of economic and social empowerment, particularly among low-income and underserved populations. FRA views it as an essential tool in advancing the state's broader financial inclusion agenda and supporting sustainable development. He noted that microinsurance products in Egypt now offer a wide range of coverage, including protection for small, medium, and micro-enterprises against risks such as death, disability, and loan default. Insurers also provide coverage for operational risks like fire and theft. In the agricultural sector, tailored policies now protect crops, livestock, and poultry, helping farmers safeguard both their livelihoods and food security. Since 2016, FRA has taken concrete steps to establish a legislative framework specifically for microinsurance. This framework supports the sector's integration with FRA's digital infrastructure strategy for insurance distribution and aligns with the broader goals of financial and insurance inclusion. Over the years, the authority has increased the coverage cap to keep pace with inflation and evolving market dynamics. Initially set at EGP 100,000 in 2016, the cap was raised to EGP 200,000 in 2021, then to EGP 242,000 in 2024. The Unified Insurance Law authorized FRA's Board to increase this cap by up to 25% annually. Accordingly, it was raised to EGP 250,000 and then to EGP 312,500 in 2025, reflecting the Authority's proactive response to economic changes. Islam Azzam Azzam also highlighted the transformative impact of the recently enacted Unified Insurance Law. He described it as a foundational shift for the Egyptian insurance sector, establishing a modern legal structure to regulate insurance and reinsurance activities, as well as associated services and professional functions. The law grants FRA exclusive authority to license, supervise, and regulate all insurance-related entities, consolidating oversight under a single framework to enhance market stability and regulatory efficiency. As part of this reform, FRA introduced new capital requirements that will be implemented in two phases. The second phase mandates a minimum capital of EGP 600m for insurance companies, aimed at strengthening their financial resilience. Additionally, new investment rules have been established to guide how insurers manage their funds, ensuring a balance between returns and risk while improving overall asset management performance. Insurers are now required to submit financial statements on a regular schedule to promote transparency and fiscal discipline. The Authority has also issued technical standards for calculating and building technical reserves for both property and liability insurance, ensuring that companies remain solvent and capable of meeting their obligations. Azzam added that FRA has updated regulations governing the establishment and licensing of insurance and reinsurance firms. These revised rules set clear legal and technical conditions to ensure that new market entrants are both competent and financially sound. Significantly, the Unified Insurance Law also permits the formation of specialized companies dedicated solely to microinsurance. FRA has since issued specific regulations for the founding and licensing of such companies, setting a minimum capital requirement of EGP 40m to ensure they operate on a solid financial footing and effectively serve underserved communities. Azzam reported that the past fiscal year, which ended on June 30, 2024, saw strong financial and operational performance in the microinsurance sector. These achievements reflect FRA's continued commitment to extending coverage to vulnerable populations and broadening the base of insurance beneficiaries in Egypt. He also emphasized FRA's accelerated efforts to digitize the insurance sector. The Authority is leveraging financial technology to expand access to microinsurance and promote social protection among low-income groups. One of the key milestones in this digital transition has been the introduction of online issuance for standard insurance policies, including mandatory motor insurance, term life, personal accident, and microinsurance, as permitted under Decision No. 121 of 2015 and its subsequent amendments. This digital drive is further reinforced by regulatory frameworks adopted under Fintech Law No. 5 of 2022. These include updated standards for IT infrastructure and cybersecurity, new rules for digital identity, contracts, and ledgers, and guidelines for outsourcing and data governance in financial technology operations. These frameworks are part of FRA's broader vision to modernize Egypt's non-banking financial services, align the sector with global best practices, and drive inclusive economic growth. In closing, Azzam reaffirmed FRA's dedication to continually enhancing Egypt's legislative and regulatory environment for insurance. He stressed the Authority's goal of enabling the microinsurance market to reach its full potential as a mechanism for financial inclusion, social equity, and long-term economic sustainability.
