The Unified Insurance Law No. 155 of 2024 was issued and came into force on July 12, 2024. Its purpose is to consolidate the laws related to insurance activities into a single law, as previous insurance laws were scattered across various separate pieces of legislation.
In this article, we will discuss microinsurance, an emerging sector that provides appropriate insurance coverage for small, medium, and micro enterprises.
Definition of Microinsurance:
Microinsurance is an insurance service targeting low-income individuals, covering properties and persons, to provide protection against risks they may face, in exchange for premiums appropriate to the nature of the risk.
Importance of Microinsurance:
Microinsurance plays a significant role in increasing insurance penetration by providing coverage for the risks faced by small, medium, and micro enterprises.
Significance of Microinsurance:
Microinsurance offers insurance companies the opportunity to reach low-income segments of society by entering into contracts with microfinance institutions, providing protection against various risks for individuals receiving microloans, including coverage for the risk of loan repayment default.
The microinsurance sector is continuously growing. According to statistics from the Insurance Indicator, the number of companies offering this type of insurance has increased to 15, with the number of insured individuals rising to 6.3 million in 2023. The total premiums amounted to 377 million Egyptian pounds. Additionally, the maximum limit for microinsurance coverage has been increased by 10%, reaching 242,000 pounds, up from 220,000 pounds.
This makes the sector attractive for investment, especially since Law No. 155 of 2024 has established a legislative framework for creating specialized companies in the field of microinsurance. Additionally, there is a strong shift toward utilizing electronic applications and artificial intelligence in Egypt’s insurance industry, which helps reduce costs, improve service speed, and enhance responsiveness, thereby increasing the returns generated from investment in this sector.
Article Written by Safwat Nasr.