36979 - AXA Egypt Insurance

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Summary of Investment Information

Project Number

36979

Company Name

AXA EGYPT INVESTMENTS SAE

Date SPI Disclosed

Nov 17, 2016

Country

Egypt, Arab Republic of

Region

Africa

Projected Board Date

Dec 20, 2016

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Sep 30, 2022

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Jan 18, 2017
Signed : Jan 31, 2017
Invested : May 8, 2017

Sector

Composite Insurance (Life and Non-life)

Project Description

The project consists of an IFC investment for an equity stake of 10 percent in AXA Egypt Investments SAE (“AXA Egypt” or the “Company”). AXA Egypt is the holding company of two wholly owned Egyptian licensed joint stock insurance companies, specialized in, respectively, Life & Savings and Property & Casualty. It is expected the Company will also acquire a service company in due course. The Company plans to offer life, health and non-life insurance covers to individuals, SMEs and corporate clients. Through AXA Egypt, AXA intends to leverage the strength of its global presence and play a significant role in the fledgling private health sector in Egypt through health insurance and integrated health services. Life insurance products shall be provided through AXA Life Egypt, the former CIL life insurance company in Egypt acquired by AXA in 2015, while non-life insurance products will be provided through AXA General Insurance Egypt (formed in 2015).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	15.50

Development Impact

The project is expected to have a strong developmental impact by:

1) Enabling Fund Accumulation and Allocation: Insurers deploy long-term funds into the economy, allowing for long-term fund accumulation, thus supporting economic development and infrastructure build-up. This is particularly relevant for insurers with life businesses, which take long-term liabilities to provide life coverage to their policyholders and therefore seek long-term assets to invest into. Through the acquisition of CIL (a former IFC investee company, now AXA Life Egypt), AXA Egypt is expected to be a formidable player in Egypt''s life insurance space.

2) Buttressing the Health Sector: AXA Egypt will enter the health insurance market and explores options to engage at a later stage in Health Maintenance Organization (HMO) services. This will contribute to closing the service gap as a growing middle class is seeking better healthcare and are expected to turn to privately run health care providers and insurers. The availability of sufficient private health care providers will lower overall private health care cost and make it more affordable for many upwardly mobile Egyptians to move out of the public health care system. This in turn is expected to unburden the public health care system, creating less stress on the limited resources of public health care.

3) Support to SMEs: AXA Egypt aims to launch standardized, but adaptable SME insurance packages, thereby providing insurance cover to SMEs in a more cost-effective manner and ensuring this growing segment of the Egyptian economy.

4) Support of Societies in Transition: Societies in transition and going through upheavals are in great need for risk management services so that individuals can be offered a safety net and can improve their social stability. Businesses can mitigate their enterprise risk through insurance coverage and thus are more comfortable taking risks and invest more.

1) Strategic Relationship: AXA is a strategic key relationship for IFC and a global partner in development with a large footprint in the insurance space worldwide, including emerging markets. IFC and AXA have signed a MoU which includes - apart from insurance coverage for women, road safety and micro-insurance - a strong intent to work together in new markets where AXA intends to enter. AXA believes there are significant benefits in IFC working alongside AXA in untapped markets and has therefore invited IFC into the proposed transaction.

2) Regional Knowledge & Sector Experience: IFC can share its knowledge and experience as a long-standing investor in the region with the possibility of bringing bank and corporate relationships, contacts with government authorities, as well as knowledge to AXA Egypt. Lastly, IFC has expertise in establishing greenfield companies, which can complement AXA''s own experience in that area.

3) Real Sector Footprint of IFC: IFC''s network of clients in the real sector in Egypt is seen by AXA as a valuable tool to connect with manufacturing, services, and infrastructure firms and projects which need insurance coverage.

E&S Category Rationale / Risks and Mitigation

The proposed project is an equity investment in AXA Egypt. AXA Egypt insurance activities include non-life (including health) and life insurance operations. For life and savings insurance, AXA Egypt has exposure to both individuals, SMEs and large corporate clients. For non-life insurance, AXA's highest portfolio exposure is to healthcare insurance followed by engineering, and it is mainly targeted to large corporates. In engineering, AXA provides solutions to cater for construction projects in various sectors. AXA Egypt's portfolio is expected largely to be comprised of business activities that have limited adverse environmental and social risks and impacts that are few in number, site specific, largely reversible and can be readily addressed through mitigation measures. This project is classified as Category FI-2 project according to IFC's Sustainability Policy. For this project the client will be required to screen its portfolio against the IFC Exclusion List, host country Environmental and Social laws and regulations, and an eligibility criteria based on certain IFC Performance Standards, where applicable.

AXA Egypt has an environmental policy in place covering their internal processes, including water and energy efficiency, waste recycling, responsible purchasing, and training of employees. AXA will be required to develop E&S Procedures addressing the E&S risks of its portfolio. AXA Egypt has an employee's hand book covering labor and working conditions substantially in line with Performance Standard 2. AXA Egypt is in the process of finalizing integrated HR policies and procedures. AXA Egypt will be required to manage environmental and social risks associated with its investments in line with the applicable requirements, which include the following: a) establishing E&S Procedures to screen its insurance portfolio, b) designating staff members responsible for E&S issues, c) providing them with the necessary training for implementation of the E&S Procedures.

Task Title & Description	Actual Due Date	Status	Comments	Completion Date
Nominate officers	11/30/2016	Completed	notification email sent to IFC	12/20/2016
Other1 Establish E&S procedures	05/31/2021	Rescheduled
Other2 Develop Staff training plan and training of Staff	04/30/2021	Rescheduled

Contacts

For Inquiries About the Project, Contact

AXA Egypt Investments S.A.E.
Gilbert Chahine
CEO
Nile City Towers, North Tower 18th floor, 2005 C Cornish El Nile – Ramlet Beaulac
Cairo – Egypt
Phone: +202-2461-3613
E-mail: mailto:gilbert.chahine@axa-egypt.com

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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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