News
Misr Could Face IPO Value Scrunity
| May 2, 2010 by Tracey Scott
Putting price on Egyptian insurer’s life assets a major challenge, report says.
The forthcoming privatisation of Misr Insurance’s life operations through an IPO could be faced with valuation challenges, a report suggests.
In the Egypt Insurance Report for Q2 2010, determining a value for Misr’s life assets that is both reasonable from the point of view of the government and potential buyers “is one of the major challenges”.
The report says challenges could arise because the latest premium figures for the Insurance Holding Company, the state-owned enterprise which overseas Misr, have not yet been released.
However, it says the prospects for the Egyptian economy and insurance market, which was largely isolated from the impact of the global financial crisis, are favourable.
The market is open to foreign competition, and the government is moving slowly towards financial liberalisation.
According to the Egyptian insurance regulator, total premiums in the year to June 30 2008 were EGP9,943 million.
The regulator says IHC total premiums written by IHC’s companies amounted to EGP3,905 million.
The latest SIGMA report shows that total premiums for 2008 in Egypt reached US$1.39bn, life premiums US$635m and non-life premiums US$754.
Although privatisation has many advantages, I think if it is not well planned it may disturb the growth of the company, sector and maybe the entire economy.