Misr Insurance Holding Company (MIHC) aims to achieve 10% growth in consolidated net profits by the end of the current fiscal year in June 2020, MIHC Chairperson and Managing Director Basel El Hini.
He told Daily News Egypt that the company’s plan depends on achieving ambitious growth rates in various activities, which would lead to achieving the target profits.
The MIHC ordinary general assembly recently approved the financial statements of the company and its subsidiaries for the fiscal year (FY) 2018/19.
According to El Hini, the group achieved the largest profits in its history, with net profits reaching EGP 4bn with a growth rate of 22.5% compared to FY 2017/18.
El Hini said the state’s share in the company’s profits in FY 2018/19 increased to EGP 1.5bn, with a growth rate of 98.1% compared to 2017/18. He added that the group achieved effective and influential results in developing insurance services for subsidiaries, through fast and interactive means with both the customers and the marketing sector through modern communication channels, such as mobile applications and electronic collection, and keenness to provide high-quality insurance service through creating a highly qualified actuarial team in the fields of life and property insurance.
MIHC is adopting a completely new way to manage the huge financial investment portfolio, which achieved the expected returns for years.
This is done through Misr Asset Management, which is wholly owned by the group and supported by specialists in this field in managing that portfolio, with the assistance of major asset management companies in the Egyptian market, with the aim of devoting rational management to state-owned assets, by maximising the value of that financial portfolio and improve the return on it.
With regard to real estate activity, he said that the Group seeks to benefit of its real estate assets, managed by Misr Real Estate Management, through the establishment of projects in partnership with real estate investors and developers.
El Hini said there is a plot of land in the Rod Al-Farag district that is strongly recommended for development, and there is contact with real estate developers to make a proposal to develop this land.
He stressed the company’s keenness to preserve Egypt’s historical properties and maximise their value, in coordination with the relevant authorities and international institutions. He ruled out selling these buildings, saying there is a plan to develop many of them, either by the company itself or in partnership with others, under usufruct. The company is now in talks with developers to define the usufruct period.
He pointed out that the European Bank for Reconstruction and Development tasked a specialised company to study the MIHC’s real estate portfolio and how it can be used, which is expected to be ready within six months.
The MIHC also aims to switch all its properties leased under old rent contracts to new contracts, which would generate continuous liquidity.
The company owns 7,916 units leased under old rent contracts, representing about 88% of its real estate assets. They generate only EGP 30m, equivalent to 29% of the company’s total revenues from rentals. Other 1,126 units are leased under new contracts, representing only 12% of its real estate assets. They generate EGP 72m, equivalent to 71% of the company’s total revenues from rentals.
The MIHC established new companies to enhance its position as non-bank financial entity, including the Misr Takaful Insurance Company – Hayat, which was launched jointly by MIHC, Misr Life Insurance, Misr Insurance, the National Bank of Egypt (NBE), Banque Misr, and Misr Financial Investment Company. The company also considers the establishment of medical insurance, financial leasing, factoring, and consumer financing companies.
The proposed financial leasing company is a top priority for the MIHC. A financial advisor will be contracted to do the necessary study for it.
El Hini pointed out that a company specializing in microfinance would also be established, but not at the present time.
On a different note, he said his company contracted with an international reinsurance company to prepare a technical and logistical study for a new medical insurance company, pointing out that this study is currently underway, and its results are expected to appear within the next three months.
“The MIHC is the largest non-bank financial group in Egypt, but its main activity is insurance, and we want to cover other activities, but it is important for studies to prove the feasibility of establishing these companies,” El Hini said. “We are a profit-oriented company, we have the state’s contribution, and we aim to generate profits for the state.”
He added that the company owns stakes in some investment arms, but the new trend is to have ruling stakes in the companies that they establish.
Regarding the “fragmented” contributions owned by the group, the National Bank of Egypt, Banque Misr, and the National Investment Bank in many companies, El Hini said that a four-way group comprising representatives of these four entities had been formed, whose task is to find a way to deal with these contributions.
All options regarding these contributions are on the table, whether exiting from companies, increasing stakes, or combining them under the management of one of the four parties. After consultations among the four sides, they agreed to exit from two companies.
Regarding the company’s external expansion, El Hini said that the MIHC has a presence in Dubai, Kuwait, and Qatar.
Dubai’s and Qatar’s branches achieved good results, but there is no thought of expansion there, while the Kuwait’s branch incurred losses, and there is a study underway to improve its conditions.
As for Africa, El Hini said some studies were conducted over the African markets in this regard and they proved the futility of expansion there. “However, we seek to increase reinsurance activity with African countries, and to make strategic partnerships with international insurance companies operating in Africa,” he concluded.