Egypt is just emerging from a two week period of unrest and revolution. It’s still unclear which direction the country will head in now that its government has been torn apart and replaced by the heads of the army but it does look like a new form of Middle Eastern democracy could emerge and insurers are already seeing opportunities.
Forward thinking insurers who already deal in Takaful, or Islamic insurance, are now discussing the potential for microtakaful to help the Egyptian people and economy get back on its feet. Microtakaful is essentially micro-Islamic insurance and is targeted at low income people who cannot afford normal insurance premiums.
Much of the Egyptian population lives below the internationally accepted poverty line and microinsurance could be a lifeline which helps them make farming more profitable. Use of microinsurance techniques such as index-linked weather insurance cover for crops, resulting in highly predictable insurance policies which pay out based on actual weather conditions, could be extremely important in the variable climate of the Middle East countries.
It’s vital that Egypt receives the international help and attention required to help it fulfill its dream of democracy. Providing cheap, understandable financial services through microinsurance and microtakaful is just one way to help the population come out the other side of this period of unrest in a positive manner.