The Financial Regulatory Authority (FRA) revealed that a total of EGP 2.5bn was paid in property and liability insurance from April to June 2022, compared to EGP 2.3bn during the same period in the previous year, with a growth rate of 11%.
Mohamed Farid, Chairperson of the FRA, issued periodic report No. 6 of 2022, regarding the re-evaluation of the values of insured assets and the amounts of insurance compared to their market values, in a manner that preserves the rights of policyholders and their beneficiaries.
The decision obliged insurance companies to research clients by communicating with them to re-estimate the insurance amounts of the insured assets in proportion to their current market values, as well as to conduct periodic inspections of the assets subject to insurance to verify the proportion of insurance coverages with their real value, in accordance with Law No. 10 of 1981 of Insurance and its executive regulations control and supervision.
The decision came as a result of the recent increase in customers’ complaints due to the decrease in the amounts of compensation paid to them, especially in light of developments and macroeconomic variables and the consequent increase in prices, as well as the increase in the current values of the insured assets.
Farid said that the decision activates the main competencies of the authority in the field of regulating non-bank financial activities, controlling their markets and monitoring the integrity of their performance. Law no. 10 of 2009 stressed these aspects, in parallel with protecting the rights of all parties dealing within the insurance system. Farid stressed that the decision, to a large extent, contributes to providing protection for the rights of dealers in the Egyptian insurance market, especially in the field of property and liabilities.
In implementing the decision, the FRA aims to ensure the adequacy and appropriateness of the value of the insured asset with the amount insured in the policy, in order to ensure that the value of the insured asset is covered in the case of a risk. This aims to protect the rights of dealers as well as ensure the safety and stability of transactions within the insurance system and avoid more risks.
The FRA is always eager to inform all parties dealing in the insurance market and all non-bank financial markets of their rights as well as their obligations. This aims to achieve the desired benefit from all services and products provided by non-banking financial activities so that customers are not exposed to a greater cost in case of an increase in the market value of an asset subject to insurance.
In April 2022, the Authority requested that clients of property and liability insurance companies review the insurance amounts in the valid insurance policies to ensure that the value of the insurance amount is sufficient to cover the value of insured assets.