CAIRO: The Egyptian Insurance Supervisory Authority is close to developing new models and regulations for investment of local insurance funds.
Sources told reporters on Tuesday that the bulk of insurers investment portfolios would focus on investments in securities. Most companies have concentrated their investments in bank deposits over the past few years, which has cut down return on investment as interest rates have declined.
Ezzat Al-Sawaf, head of financial and investment supervision at EISA, pointed out that investment in the real estate sector would acquire priority in redirection of insurers funds, taking into account the large opportunities in the real estate market.
He added that the new regulations on investment quotas for insurance funds would be flexible in order to give insurers a greater margin of freedom to concentrate investments in high-return activities.
For life insurance funds, the maximum quota for investment in securities and mutual funds will be increased to 32 percent from 25 percent, al-Sawaf said. The maximum quota for investment in bank deposits, meanwhile, will be slashed to 35 percent of funds from 50 percent. The minimum quota for investment in real estate will be increased to 25 percent from 20 percent of life insurance funds.
For non-life insurance funds, the maximum quota for investment in securities and mutual funds will be increased to 30 percent from 25 percent. The minimum quota for investment in real estate will be increased to 15 percent from 10 percent. Other investment quotas will remain unchanged.
Investment quotas for insurance funds have remained fixed since the promulgation of the Insurance Law in 1983, giving rise to demands among insurance companies for revising the quotas in line with recent economic changes.