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Egyptian Takaful Companies Expand their Investments

In 2014, twelve Egyptian insurance companies bought EGP 550 million of investment certificates in the Suez Canal expansion. This group included three takaful companies: Egyptian Life Takaful Company, who contributed EGP 30 million, Wethaq Takaful Insurance – Egypt, who contributed EGP 17 million, and Arab Orient Takaful Insurance Company, who contributed EGP 50 million. As suggested by the nearly EGP 100 million invested in the Suez Canal expansion, Egyptian takaful companies have been expanding and diversifying their investments.

Although it did not invest in the Suez Canal expansion, Orient Takaful Insurance Company-Egypt has grown rapidly. At the end of fiscal year 2013-14, its investments were worth EGP 256.2 million, which grew to EGP 357.2 million at the end of fiscal year 2014-15. It expects to see its investment portfolio exceed EGP 400 million by the end of fiscal year 2015-16. This company is not alone among takaful companies in experiencing rapid growth. The Egyptian Takaful Insurance Company—Non-life expects its investments to increase from EGP 414 million at the end of fiscal year 2014-15 to EGP 490 million by the end of fiscal year 2015-16.

After investing in the Suez Canal in 2014, Wethaq Takaful Insurance – Egypt in 2015 plans to launch two real estate investment funds. It is currently meeting with regulators, but upon approval, Wethaq expects these funds to grow rapidly, to a total value of EGP 500 million by the end of 2016. Last month, Egyptian Takaful Insurance Company—Non-life began studying an investment in a carbon black company, which would be located in Alexandria. This company would have a total capital of EGP 1 billion.

The increased size and diversity of investments by takaful companies in Egypt over the past year illustrates the breadth of Shariah-compliant financial opportunities.