IFC is investing up to US$124mn to help the firm extend its health and commercial risk insurance services across the Middle East and North Africa
IFC, a member of the World Bank Group, is making the investment into the Mediterranean and Gulf Insurance and Reinsurance Company (Medgulf) to increase its presence in the MENA region where low coverage rates hinder economic development. The acquisition of an up to 15 per cent equity stake in Medgulf will support the company as it looks to expand into Egypt, Iraq and Turkey, where many people lack insurance coverage.
“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 the shortage of insurance coverage in the Middle East remains severe, Medgulf has a strong strategic vision and the capacity to meet rising demand."
The Middle East has the lowest rates of insurance coverage in the world, with gross premiums around one per cent of regional GDP, which breeds uncertainty within households, hindering investment and job creation. In the Middle East and North Africa, 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 Dimitris Tsitsiragos, 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."
It is hoped that this investment will also help institutionalise best practices in the insurance sector. The move forms part of IFC’s efforts in the Middle East and North Africa to promote economic development by supporting private enterprise. In the last year, IFC has invested over US$2bn in the region, including mobilisation.
