Mon, 16 Oct 2023 - 08:59 GMT
Mon, 16 Oct 2023 - 08:59 GMT
CAIRO - 16 October 2023: The Egyptian Financial Regulatory Authority (FRA) has accomplished a groundbreaking milestone in the country's insurance industry by developing and unveiling the first-ever Egyptian actuarial tables, a significant departure from relying on English actuarial tables issued since 1967. This initiative is part of the FRA's comprehensive efforts to enhance insurance companies' capacity for efficiently pricing their products in line with the evolving data and indicators.
The newly established tables will be mandatory for all life and capital formation insurance companies in Egypt, emphasizing the importance of these entities annually providing the FRA with a statistical report on actual death rates compared to the rates listed in the new tables. This data will be communicated through an electronic model prepared by the FRA.
The significance of these tables is exceptional as the existing tables in use have not been updated since 1967 and are no longer reflective of the current reality. Consequently, the FRA, in collaboration with relevant stakeholders, embarked on the preparation of Egypt's inaugural actuarial tables. These tables are designed to incorporate various developments in the data and statistics used for life insurance policy pricing by Egyptian life insurance companies, forming the foundation for continuous updates based on companies' actual experiences.
Dr. Mohamed Farid, the Chairman of the Egyptian Financial Regulatory Authority, noted that Egypt is the first Arab country to have its own actuarial tables. He emphasized that these new tables will enable insurance companies to efficiently price their insurance products based on relevant data and statistics. The FRA's aim is to enhance the insurance market in Egypt, enabling different companies to develop new insurance products that meet customer needs based on up-to-date data.
Dr. Farid added that these tables will support the development and growth of Egypt's insurance market, enabling companies to price their insurance products effectively based on locally-prepared actuarial tables. At present, companies can use these tables as a reference guide, while notifying the FRA continuously to update the data, monitor results, and assess performance.
Despite Egypt's society having been familiar with insurance activities for over 120 years since the establishment of the first Egyptian insurance company in 1900, the use of English tables as the closest models aligned with Egyptian realities concerning death and disability rates prompted the FRA to initiate the development of Egypt's first actuarial tables. This step is crucial for aligning the sector with the best international practices in insurance markets.
The development of the inaugural Egyptian actuarial tables complements the extensive efforts undertaken by the FRA to enhance the efficiency and competitiveness of the insurance market in Egypt. These efforts are of utmost importance in supporting the national economy by contributing effectively to increasing national savings, the primary source of investment, and a fundamental component for supporting economic growth. The recent FRA resolution obligating insurance companies to prepare indicative pricing studies for their various products, with annual reviews, underscores the need for adopting these new tables. This emphasizes the importance of the FRA's continuous commitment to enhancing market efficiency, ensuring the fairness and transparency of transactions, and balancing the rights of all stakeholders, particularly policyholders.
Dr. Farid expressed his appreciation to all parties involved in achieving these tables in their final form. He extended his gratitude to everyone who supported the initiative financially and technically. He acknowledged that the development of these tables is the culmination of the efforts of previous FRA administrations, finalized by the current administration to see the light and come into effect.