CAIRO: IFC, a member of the World Bank Group, said it is investing up to $124 million in the Mediterranean and Gulf Insurance and Reinsurance Company (Medgulf), a regional insurer.
The investment is meant to help the firm extend its health and commercial risk insurance services across the Middle East and North Africa, according to a statement.
IFC said that its acquisition of up to a 15 percent equity stake in Medgulf “will support the company as it looks to expand into Egypt, Iraq and Turkey, where many people lack insurance coverage.”
According to the IFC, low coverage rates in the MENA region hinder economic development.
“The partnership with IFC will help Medgulf grow its operational capabilities to extend security to people who would otherwise have limited means of coping with calamities,” said Lutfi El Zein, chairman of Medgulf.
"While shortage of insurance coverage in the Middle East remains severe, Medgulf has a strong strategic vision and the capacity to meet rising demand," he added.
The Middle East has the lowest rates of insurance coverage in the world, with gross premiums around 1 percent of regional GDP, the statement read, “which breeds uncertainty within households, hindering investment and job creation.”
In MENA, the share of the population aged 65 years and older is expected to more than triple by 2050, demanding an increase in health, life, and pension insurance services.
“IFC’s investment in Medgulf supports our strategy to help extend essential services to underserved parts of the population by encouraging cross-border investments within the region,” said Dimitiris Tsitsirgaros, IFC vice president for Eastern and Southern Europe, Central Asia, Middle East and North Africa.
"Addressing insurance needs in the region will make it easier for people to access healthcare, while an increased sense of security will help businesses grow."
“This investment will also help institutionalize best practices in the insurance sector, where Medgulf is a model of sound corporate governance and transparency. It is part of IFC’s efforts in the Middle East and North Africa to promote economic development by supporting private enterprise,” the statement read.
IFC said in the last year, it has invested over $2 billion in the region, including mobilization.
