The Insurers Federation of Egypt (IFE) believes that global conflicts since 2020 have highlighted the increasing complexity of the geopolitical, social and economic factors facing insurance companies, noting that the positive aspect of these crises is that insurance companies have learned how to navigate and and even thrive in a world whose outlook is darkened by uncertainty.
In its latest weekly bulletin released on 15 March, the IFE said that during periods of conflict, risks such as property damage, business disruptions, and liability claims increase, as well as operational risks and supply chain disruptions, threatening to restrict growth and increase inflation.
Strategies
The IFE suggested that insurance companies could adopt the following strategies to leverage risk for growth:
• Adopt dynamic pricing techniques and advanced analytics by employing machine learning and artificial intelligence technologies to develop flexible pricing models that reflect the changing market reality.
• Sharpen risk assessment by integrating geopolitical and economic factors so that the insurance company can identify weaknesses and reassess the level of risk exposure.
• Implement flexible investment strategies, which contributes to efficient asset management, liquidity planning and diversification of investment portfolios, which helps the company cope with interest rate fluctuations and market volatility.
• Maintain capital structures that ensure sufficient reserves to meet the needs of clients, investors, and credit rating agencies, even under conditions of extreme stress. This includes assessing the capital structure, its efficiency, and the ability to raise additional capital when needed.
• Building technical capabilities and specialised underwriting expertise in cyber risk insurance to meet growing demand and effectively manage the associated risks.