insurance by sandeshbhat


									Abstract This research studies the assessment of the life insurance industry in Egypt. In general, life insurance is an important industry in all developed economies, as well as in several less developed countries. Its development is explained by the general level on income and wealth in the economy, but its strength is an input for the welfare of the population, providing coverage to reduce the variability of income and wealth of the insured and their families. Life insurance products (or policies) are used not only as a means to mitigate the financial impact of death, disability, diseases and accidents, but also of longevity. A well developed life insurance industry is a reflection of a well organized and sophisticated economy, with a great portion of risks faced by individuals being properly handled on the one hand, and with a sound and large capital market on the other. Normally, life insurance companies will invest its huge reserves in all types of long term securities, playing a vital role as the main provider of funds for long term projects. The life insurance industry in Egypt suffers from several problems related to the Insurance law such as the requirements for licenses, minimum capital, foreign branches, product development, price competition, distribution, free access to local and foreign reinsurance, and mandatory reinsurance. Other problems are related to the presence of overlapping with other security and private funds benefits, capital markets and the present regulations on investments by insurance companies. In addition, there are problems concerning the insurance taxation, mortality tables, indexation of insurance benefits, underdevelopment of technology and managerial know how, marketing problems, lack of competitive measures with other saving channels, low efficiency of sales people, and lack of insurance awareness. Proposals of developing the insurance industry include minimizing the minimum initial capital for establishing a company under the Egyptian Law, diversifying the available product development to satisfy all needs of clients, constructing a special mortality table based on the Egyptian experience to minimize prices and attract more clients, promoting insurance intermediation, reducing mandatory ceding ratios to the Egypt Reinsurance Company, avoiding any overlapping with the other social and complementary systems, solving the taxation problem, indexation of benefits to take into account the effect of inflation on the insurance benefits, promoting marketing research, improving the efficiency of the sales force, increasing insurance awareness, and adopting modernized technology.

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