The decision states that each fund must invest between 5
percent and 20 percent of its total assets in listed equities if its
investments exceed EGP 100 million. Each fund must also ensure that the amount
invested in any open-end investment fund does not exceed 5 percent of its total
assets or 10 percent of the fund’s net asset value, whichever is lower. The FRA
set a six-month period for compliance, with the possibility of extension if
needed.
Dr. Mohamed Farid, Chairman of the Financial Regulatory
Authority (FRA), affirmed that regulating the investments of government
insurance funds has become essential to maximizing returns and improving the
efficiency of asset management. His remarks came within a broader vision aimed
at enhancing the management quality of these funds and strengthening their
ability to achieve their insurance and social objectives.
Government insurance funds operate separately from social
insurance and pension systems. These funds are established by state decisions
issued through legislation, presidential decrees or decisions by the Prime
Minister. They operate under the supervision of the Financial Regulatory
Authority (FRA).
These funds serve around 29 million beneficiaries. Their
purpose is to protect specific groups from risks that private insurance
companies typically do not accept or that the government decides to manage
directly.
Farid stated that these funds were created to protect
defined segments of society. He explained that these groups have the right to
have their assets managed according to the highest standards of investment,
governance and risk management.
The Chairman added that every pound in government insurance
funds is a trust belonging to citizens. He emphasized the responsibility to
safeguard these assets and enhance their returns. His remarks highlighted that
the FRA’s decisions protect beneficiaries’ rights and ensure that each fund
remains capable of meeting its obligations.
He noted that the future of insurance services depends on
the professional management of these assets. He pointed out that any
improvement in investment returns ultimately strengthens each fund’s ability to
fulfill its commitments.
He stated that deeper coordination between capital markets
and the insurance sector has become a key pillar for improving the investment
performance of insurance funds. Strategic partnerships are expected to expand
diversification and enhance safe investment opportunities.
The number of government insurance funds registered with the
Financial Regulatory Authority (FRA) stands at about six. These funds cover
several sectors, including public liability, postal service risks, insurance
for mechanized fishing vessels, motor vehicle accident coverage, insurance and
welfare for school students in Egypt, and government insurance for students in
Al Azhar institutions.
Government insurance fund investments reached approximately
EGP 2.1 billion as of June 30, 2025. These investments are distributed across
several channels, including money market funds, fixed-income funds, unlisted
equities, current accounts, treasury bills and bank deposits.
These efforts fall within a comprehensive strategy by the
Financial Regulatory Authority (FRA) to enhance the competitiveness of the
non-bank financial sector. The strategy aims to ensure professional management
of the funds in a manner that serves the interests of the state and
beneficiaries.
The FRA required private insurance funds in February to
allocate between 5 percent and 20 percent of their assets to units of open-end
investment funds that invest in equities listed on Egyptian stock exchanges.
The FRA also required insurance companies to invest at least
5 percent of their free assets in open-end investment funds that invest in
listed equities.