OBG talks to Ashraf Kadry El Sharkawy, Former Chairman, Egyptian Financial Supervisory Authority (EFSA)

Interview: Ashraf Kadry El Sharkawy

What are the main points of the regulatory strategy for the insurance sector?

ASHRAF KADRY EL SHARKAWY: Our main priority is to safeguard insurance policyholders across the country. However, at the same time, we want to reduce the amount of complaints that we receive from the delay of payments, and to work with companies to limit the number of cases where this happens. The growing number of high-risk claims leads to an increased amount of time it takes to reimburse the customer. These delays in payment indirectly affect sector growth. When people have insurance coverage, they expect to be reimbursed immediately, and where there is a slight delay problems arise. Our other focus is to boost insurance coverage in areas that are less diverse. We need to make sure that we are providing coverage everywhere and to everyone.

In what way do you see new products coming into the insurance sector, and how has the current situation revitalised a culture of insurance?

EL SHARKAWY: We are focusing on providing new coverage, introducing new products and promoting the importance of insurance to raise awareness among the population. While there is growth in the industry, we are striving for more, in order to have a percentage of GDP that is comparable to our peers. We are still at the growth stage in Egypt, with figures up in 2012 on 2011. As of now we are covering every type of insurance, but we need to focus on tailored packages to meet the needs of individuals. In the future, we aim to attract international companies, as they provide expertise and can establish their own branches throughout Egypt, as well as to help improve professionalism by setting higher standards. A few companies have already entered the market and we will continue to attract more.

Our companies are in a strong financial position and they have received many claims during and after the revolution. What happened during those events is a good example of the rising number of claims, where many downtown shops saw what occurred and how it affected their and others’ businesses. It ultimately encouraged them to take out claims for themselves to protect their companies from damage or closure. It is very important for the economy to have insurance companies with good capital and in a healthy financial position to be able to cover any claim.

The revolution has helped insurance companies in many ways by fostering a culture of being better insured. It has also led to the emergence of new types of insurance and created the opportunities for companies to add on different types of premiums. They have introduced new options for generic policies and are adding packages that can cater to many diverse areas in providing coverage everywhere.

To what extent does the EFSA contribute towards the improvement of personnel and code of ethics?

EL SHARKAWY: We cooperate closely with the insurance union and ask for specific requirements for key job positions. We also set exams and licensing criteria for brokers and licensing experts so that they are set up properly for a job. For some positions, we look at the credentials of candidates and give them approval depending on knowledge and education.

When brokerage companies have a minimum of LE2m ($284,600) capital, we do a thorough inspection and ask many requirements of them before providing a licence. Once receiving this, only one individual can hold the licence and there is no differentiation between the sizes of policy that this company may make.

We have also made some changes in licensing requirements, sanctions and brokerages. We monitor complaints that we receive from customers whenever there is a delay and then analyse the complaints by the company and by the type of insurance policy. We also interact with companies in an effort to shorten the review period. Our main priority in this regard is related to the policyholder’s rights, and this means that capital adequacy for a company is important. We need to make sure that we are covering all claims at all times.