CAIRO: Health insurance and the relationship between insurance companies and the capital markets was the focus of the second half of the Euromoney Egypt Insurance Conference Tuesday.
The one-day conference saw experts discuss the future of the insurance industry in Egypt, with the morning sessions focusing on growing the industry and issues of highway safety.
After a lunchtime speech by Secretary General of the Supreme Council of Antiquities Zahi Hawass, discussions zeroed in on health insurance and on the relationship between insurance companies and the capital markets.
Minister of Health Hatem El-Gabaly gave a keynote address in which he discussed a 10-year plan to roll out a partnership between the public and private sectors to provide more universal healthcare.
“We have gone a long way. We are one of the best developing countries in the world, said El-Gabaly, citing statistics of improved health.
But the minister acknowledged that growth in the healthcare industry has been uneven, with rural areas lagging behind urban ones.
To change this, he said, the government is working to implement a plan that will offer a baseline minimum of healthcare for all Egyptians.
“We must guarantee a package of services to give a person the treatment he needs whether he can pay or not, the minister said.
He added that the government would not work to cover all healthcare-related costs but rather it would underwrite a long list of basic health procedures.
The insurance industry, El-Gabaly said, would play an important supporting role in this systemic transition.
The new system is currently being implemented in the Suez governorate, with Sohag coming online in 2010 and Alexandria after that in 2011.
In a subsequent panel, experts and executives from the health insurance industry discussed the role health insurance might play in the new healthcare system. They also talked about the potential for growth in the industry.
“Introducing a new philosophy that healthcare should be affiliated to the patient and not the provider of the service, said Said Rateb, assistant minister of health, would give insurers a holistic way to approach their clients, as general health providers.
Nonetheless, the industry remains small. Even though 84 companies currently offer health insurance in Egypt, noted Chairman of the Health Maintenance Organization’s Union Ehab Abul-Magd, only about 1.2 million people subscribe.
The industry will be on uncertain ground for the coming years as it tries to walk through the challenges of the new healthcare system, but industry executives were confident in their ability to grow the sector.
In the day’s final panel, bankers largely agreed that the insurance companies could have a critical role in creating strong asset-backed securities as a means to spur investment.
Zeinab Khalil, vice president of the Insurance Holding Company, urged insurance companies in this economic climate to take on longer term projects to bolster the confidence of the capital markets.
May El-Hoshy, director of EFG Hermes Asset Management, warned that insurance companies need to restrain the funds they commit to capital markets in order to protect their own books.
If there was one takeaway from the conference it was that despite a global economic recession, the insurance industry in Egypt is small enough that it can continue to grow and prosper in the short and medium term. But whether the industry can affect a cultural change and convince people of the importance of having insurance remains to be seen.