We seek to seize the growth of the medical, supplementary and credit branches … and a plan is to develop the technological infrastructure of the “Insurance House” branches.
Alloting EGP 8.85 million of total assets to face the risks of applying Accounting Standard 47
Company plans Egyptian Saudi Insurance HouseThe arm of the Emirati Salama Insurance Group with the activity of Takaful property insurance in the Egyptian market, to implement a package of technical and administrative axes to continue its growth in the market as the first insurance company to practice the Takaful activity since 2002, in accordance with the provisions of Islamic Sharia under the supervision of a Sharia supervisory body, and as an Egyptian joint stock company subject to the provisions of the law No. 10 of 1981 and its implementing regulations.
Mohamed Abdel Mawla, the new managing director of the company, said in his first press interview, which was related to the newspaper “Al Borsa”, that the plan is based on seizing the opportunities available in the insurance branches eligible for growth during the coming period and developing the company’s administrative structure by modernizing the technical infrastructure and developing the company’s branches side by side. With the support of the technical departments of the company with qualified technical staff as well as maximizing the premiums portfolio and profitability in a balanced manner.
Abdel Mawla added that the company aims to reach its premium portfolio of 500 million pounds by the end of the current fiscal year 2020/2021, and aims to grow annually at a rate ranging from 12% to 15% annually.
He explained that the company’s financial position for the last fiscal year indicates that the company achieved 441 million pounds in direct installments, shareholders ’equity amounted to 280 million pounds, and policyholders’ rights 438 million pounds.
According to Abdel Mawla, the company provides all insurance services in the field of fire and burglary, engineering insurances, liabilities, personal accidents, breach of trust, transfer of cash, broken glass, car insurance, medical insurance, sea and land transportation, loan guarantee and travel aid in accordance with the rules of solidarity insurance.
The managing director of the company stated that the company promotes its products through various marketing channels, including the company’s production apparatus in addition to a diverse network of individual and corporate brokers.
He continued: “The company has strong relationships with a network of brokers, which are being strengthened through continuous meetings with them to find the best and most appropriate marketing methods to meet the customers’ desires and increase the volume of installments in parallel with the growth of the company’s profitability.”
He noted that the company is planning to boost the underwriting operations of some insurance branches eligible for growth during the coming period, and at the forefront of which is the medical branch in balance with the increase in its growth in the market as well as the government’s trend to implement the medical insurance bill, explaining that a specialized compensation department for the branch will soon be established. Urgent.
He said that «the Egyptian Saudi Insurance House» is contracting with the companies «Inaya Egypt for Medical Treatment» and «Egy Care» to manage the medical portfolio of the company in accordance with the third-party system, known by insurance as “TBA”, while we are planning to include both “Well Care” and “” MedNet »for the list of contracting and strengthening partnership with leading international companies in the field of return for this branch.
Abdel Mawla indicated that El-Tabi’s portfolio amounts to 100 million pounds, which exceeds 25% of the company’s total portfolio.
The company also plans to expand supplementary insurance for cars through contracting with agencies of distinguished international car brands through a network of brokers, as well as a technical subscription based on fair prices for the type of insured car.
He pointed out that among the insurance branches that the company is targeting to expand its underwriting is an insurance branch that guarantees non-payment risks, explaining that the administrative competencies for this branch are currently being selected.
He stressed that the underwriting policy for expansion in the aforementioned branches depends on fair pricing of risks in order to achieve a balance between the growth of the company’s insurance portfolio and the achievement of profitability of the activity as well as the continuous development of the insurance service provided to clients.
In a related context, Abdel Mawla pointed out that the form of documents is also being developed in the various insurance branches in order to allow the customer to easily identify and exclude the coverage of the document and its clauses, and in accordance with the Takaful controls recently approved by the company by the Financial Supervisory Authority.
According to Abd al-Mawla, the company recently approved the approval of the Commission on a number of amendments to the company’s articles of association to comply with the regulations for the regulation of Takaful insurance activities according to Commission Decision No. 23 of 2019, including the re-appointment of the company’s Sharia Supervisory Committee headed by Nasr Farid Wasel, the former Mufti of the Republic, and the membership of Mohamed Abdel Sattar Al-Jabali and Omar Mustafa Hassanein Al-Wardani.
The amendments also included compatibility with the new Egyptian accounting standards issued related to bridging the budget deficit, if any, and approving methods for distributing the surplus insurance activity to clients.
It is noteworthy that the Takaful insurance controls issued by the Financial Control No. 23 of 2019 regulated the relationship between the shareholders ’account and the subscribers’ account in takaful companies, and the controls for selecting, forming and performing the tasks of the Sharia supervisory bodies and others.
According to Abd al-Mawla, the company’s general assembly will approve, during its next meeting, the distribution of the surplus insurance activity for the last fiscal year, at a rate of 60% for shareholders, compared to 40% for document holders, in accordance with the controls approved by the Sharia Supervisory Committee.
The surplus of the company’s insurance activity for the last fiscal year was 92 million pounds
Abdul-Mawla indicated that the company’s infrastructure is being restructured through the strengthening of human cadres to support and develop the capabilities and skills of its employees through training courses, whether within the company or in specialized institutes.
According to Abdel Mawla, the company intends to establish a new department called the Compliance Department to ensure that the company complies with the controls and decisions of the Financial Supervisory Authority.
The administrative restructuring plan also seeks to develop the company’s technological infrastructure, including computer systems, linking branches of the company and supporting them with technical personnel in a step that seeks to improve the service provided to customers.
Abdel Mawla ruled out the opening of new branches of the company at the present time, noting the company’s focus on developing the current branches, which reach 15 branches, including the productive branches, other than the headquarters.
Regarding the investment plan of the company, he pointed out that the plan is based on the diversification of safe and fixed-return investment channels, such as treasury bills and bonds.
He added, “A large part of the company’s portfolio is directed to long-term investments such as bonds with maturities of 5, 7 and 10 years, and investment certificates of 3 years, to ensure acceptable rates of return for a long period in the event of any expected decrease in the return on treasury bills and to preserve the average target return for the company from the outcome of its investments. ».
According to Abdel Mawla, the total investment portfolio of the company for the last fiscal year was about 730 million pounds.
He said that the company has supported its financial solvency over the past years by increasing its paid-up capital in a pre-emptive step to comply with the new insurance bill, as the company’s currently paid capital reaches EGP 230 million, and the authorized capital is EGP 1 billion.
The structure of the shareholders of the Egyptian Saudi Insurance House includes the Emirati Salama Company with a share of 51.15%, the Al Tawfiq House Holding Company for Development with a share of 25.85%, Faisal Islamic Bank with a share of 13.5%, and Al Baraka Bank Egypt with a share of 9.5%.
According to Abdel Mawla, 8.85 million pounds, representing 1% of the total assets of the company, which amounted to about 885 million pounds, were set aside, to comply with the Egyptian Financial Supervisory Authority’s decision to allocate 1% of the volume of assets to face the potential risks of applying the new accounting standard No. 47.
The Financial Supervisory Authority recently issued Resolution No. 162 of 2020 requiring insurance companies subject to the Authority’s supervision and control to form a reserve to face the risks of the effects of applying the new Egyptian Accounting Standard No. 47, related to financial instruments.
Abdel-Mawla said that reinsurance agreements were renewed for the current year with Hannover Re-Takaful, the main re-insurance company of the company, under the same terms and capacities for the past year, despite the difficulties that the global reinsurance market is currently facing.
The article, Managing Director: “Insurance House” is targeting 500 million pounds in installments for the current fiscal year. It was written in the Al-Borsa newspaper.