Egypt has been going through major economic reforms, including the authorities plans to develop Egypt’s healthcare sector, through implementing the new universal healthcare law, which is to provide comprehensive medical insurance for all Egyptians.
In the wake of these developments Daily News Egypt sat down for an interview with AXA Egypt Investment CEO, Ayman Kandeel, where he shared his insights about the insurance industry future in the country. The transcript for which is below, lightly edited for clarity:
How do you view new health insurance law?
Since we launched AXA Egypt in 2015, one of our strategic priorities has been to enhance the medical insurance services offered in the markety. With that said, the recently passed universal healthcare law forwards the vision of everyone operating in the insurance industry, which is to provide comprehensive medical insurance for all Egyptians.
The economic reforms currently underway will show positive results within a few years, and we strongly believe this also applies to the insurance industry, which has a low penetration rate around 1%, a percentage we expect will increase over the next few years.
AXA’s primary objective is to provide high quality, affordable insurance products for all, and we are committed to working parallel to the government’s plans by raising the insurance awareness levels of potential and existing customers; helping them protect themselves and their families through our various insurance plans.
How can insurance penetration expand in Egyptian market?
There is great potential for expansion and growth. Given the diversity of Egypt’s economic resources, and urbanites making up the vast majority of the workforce, the middle-class is in a constant state of growth. That, coupled with the government’s implementation of comprehensive economic recovery programmes to strengthen the economy and local production capabilities, positions Egypt’s insurance sector with serious growth potential.
As I said earlier, Egypt’s insurance market represents around 1% of the total growth domestic product. A very small percentage when compared to Morocco’s 2.95%, Tunisia’s 1.8% and Turkey’s 1.37%. These indicators give us confidence in our projected growth of Egypt’s insurance industry and the potential for companies to attract more investments.
We are also constantly working on developing our services and distribution channels to meet the needs of all our target segments, such as the AXA my doctor mobile application. This is one of our key services that support our customers by giving them access to call or chat with doctors 24 hours during the week. Also, they can receive basic prescriptions, saving them time and effort of going to a doctor in acute cases.
Additionally, we are very proud of our recent partnership with Hassan Allam Properties, where AXA became the primary and exclusive insurer of Mostakbal City’s. This partnership is just a part of our wider strategic distribution plan, aimed at making our insurance products easily available to all segments through innovative and diverse distribution channels.
Oxford business group announced in their recent report that they expect premiums to be doubled within the next five years, do you share same belief?
Fundamentally, we aim at contributing to the increase of insurance penetration rate through increasing awareness about insurance and its importance to the public. Egypt has the best elements that increase potential for growth with a diversified economy, and a large sector of middle class potential customer, in addition to the availability of financial services and easy access telecommunications services. As AXA Egypt, we aim at doubling our own premium by 2020 as part of our growth strategy.
How do you view Financial Regulatory Authority (FRA) proposed changes to Insurance Act, such as establishment, licensing of operators, procedures for mergers, acquisitions, setting of industry standards, practices?
We think it is definitely a step in the right direction that preserves the rights of both insurance providers and customers alike. It also compliments the continuous efforts of the FRA to develop the insurance sector, following the international best practices.
For example, establishing an insurance company in the Egyptian market is subject to stringent laws and regulations. Among them is a minimum capital of EGP 60m and a minimum paid-up capital of EGP 30m at incorporation. Additionally, the insurer has to provide technical and economic feasibility studies, detailing its objectives and the types of insurance coverage it will provide, as well as its administration requirements, five-year plan and its technical expertise. Until all these criteria are fully met, a company cannot be issued the permits required to do business, which ensures that only serious players are allowed into the market.
Does AXA have any micro-insurance, niche offerings such as ‘Takaful’ (Islamic insurance)?
On AXA Group level, emerging customers are a huge strategic objective, where we aim to reach 3 million customers by 2020, by developing innovative channels to reach out to them; a segment we are refining our operations to be able to better meet its needs.
In Egypt, we share the same strategy of our group CEO, where AXA offers products for emerging customer. We are proudly leading the market with a customer base of 200,000 in partnership with LEAD foundation, where AXA’s loan protection insurance covers customers with outstanding loan payments, in case of death or in case they are taken ill or hospitalized, during the loan period. Given that this particular segment’s income is entirely dependent on their day to day jobs, AXA’s insurance coverage protects the sustainability of their business growth. We are currently in discussions with several future partners, who share the same vision for emerging customers in Egypt.
What about your market share?
Since we entered the Egyptian market, we had an objective of bringing our global expertise and group knowledge, to develop innovative products, and empowering customers to enjoy smart insurance services, that better suit their needs. In terms of direct premium, we are proud that AXA General Egypt ranked number three in the health insurance market, acquiring 11% of the health insurance total premiums in the year 2016/2017. Also, in terms of premiums, AXA Life Egypt ranked number two in individual life new business with almost 26% of the individual life market premiums in 2016/2017. We look forward to increasing those percentages next year, while offering high quality insurance to our customers.
What are your CSR activities? New ones?
In Egypt, we just launched our global AXA volunteering programme under the name AXA Hearts in Action internally for our employees. The initiative aims at providing our employees with an opportunity to give back to the community on various projects related to women, children, environment, health, and animals. Additionally, we engaged on recycling initiatives inside AXA Egypt, as well we paperless projects with our customers externally.
Prevention is at the core of all of AXA’s operations, and “Sayef Safely” is an extension of that belief. Continuing on our huge success last year, we have the Sayef Safely road safety prevention movement, with our partners Nada Foundation and Uber. This year, more and more major companies have come on board including Jumia, Nacita, and Total. We are working on bringing more partners on board, who believe in the importance of road safety and willing to have a real impact on reducing the number of accidents.
Beyond that, we also have CSR initiatives in partnership with the LEAD Foundation, where AXA launched a campaign for LEAD’s customers to attend seminars on the disease, prevention methods and ways to live a fulfilling life with the disease. AXA also partnered up with a number of pharmacies across Cairo to conduct blood glucose tests free of charge to help customers live healthier, better lives.
What about company’s performance in past FY 2018, targets for new one?
AXA plans on stepping up its operations and increasing the size of its investments in Egypt, given its status as a key strategic market in the Middle East. We are currently preparing to submit a request to the FRA to apply for opening new branches, to reach a wider customer base and widen our geographical footprint to more of Egypt’s governorates. AXA Egypt’s subsidiaries (AXA General Insurance and AXA Life Insurance) reported combined EGP 1.6bn in GWP during FY 2016 – FY 2017, and we proudly have over 600 members of staff working in the affiliate companies across Egypt, only in two years of operations in the market.
A brief on AXA global?
The AXA Group is a worldwide leader in insurance and asset management, with 160,000 employees serving 107 million clients in 64 countries. AXA is also the number one insurance brand for nine consecutive years, according to inter-brand. As part of its Ambition 2020 strategy, AXA enshrined its commitment to empowering customers to live a better life. It features a commitment to social innovation and sustainability, that takes care of not just the individual lives of customers, but also the society and environment, in which we all live in.