JLT Survey Reveals Private Insurers 'Open For Business' With Egypt
20 December 2016
- Majority of private credit, political and security risk insurers eyeing potential business opportunities in Egypt
- Oil & Gas, infrastructure, power, construction and technology cited as preferred sectors
A survey carried out by JLT’s Credit, Political and Security Risks (CPS) division has revealed that nearly four out of five private insurers based in the UK (79 per cent) agreed that they would actively look to seek new business opportunities within the CPS sector in Egypt, with the majority citing oil & gas, infrastructure, power, construction and technology as their preferred sectors.
Recent developments such as the provisional agreement of a US$12bn loan from the International Monetary Fund and the devaluation of the Egyptian pound have boosted the long-term financial outlook for the country. Industry has also seen some welcome developments – more specifically the energy sector which has been bolstered by the discovery this year of natural gas reserves, as well as a US$20bn investment in the oil and gas sector by private sector investors. The construction and steel industries have also seen some positive developments with 39 projects worth around US$39bn currently underway on a public private partnership basis.
Eleven per cent of the insurers that took part in JLT’s survey said that Egyptian risk was a ‘step too far’, and this is likely as a direct result of the deterioration in the government’s financial position in recent years and resultant socio-economic pressures on the country.
Ruth Lux from JLT’s Credit, Political and Security Risk Business, said: “There are many significant investment opportunities opening up to industry in Egypt, and the appetite from insurers appears to match this.
“However businesses also need to be aware that new opportunities also bring about new risk. Challenging economic conditions currently being experienced in Egypt could potentially bring about unrest and civil commotion, and so businesses need to evaluate their risk carefully before committing to investing.”
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