The Investment Ministry has selected the Paris-based BNP-Paribas, Egypt's Commercial International Bank (CIB) and the New York-based insurance consultancy firm Milliman to do the job, Investment Minister Mahmud Moidieddin said on Tuesday.
The consortium will act as a financial adviser and help "restructure the state-owned insurance companies and put them up for sale to the private sector".
"The consortium is due to begin evaluating the companies and suggest how to restructure them as soon as [the government] signs a contract with it," the ministry said, adding that this could happen over the coming weeks.
Egypt's state-owned insurance firms include the Egyptian Reinsurance Company, the Egyptian Insurance Company, al-Sharq Insurance and the National Insurance Company.
Between them, the four companies have a total investment of $2.7 billion and control 80% of Egypt's insurance market.
Moidieddin hinted in June at the need to overhaul public sector insurance firms in a way that would make them attractive for potential investors.
One of the main obstacles impeding the privatisation of these firms is the huge investments they have in the real estate market, which hardly makes any profit, Muhammad Yusuf, chairman of the national insurance watchdog, said.
The sluggish property market also often holds up capital that could be invested in other areas, he added.
New competition from foreign insurance giants, such as AIG, ACE, Allianz Group and AMIG that have moved into the Egyptian market in recent years, has added to the challenges facing the state-owned companies.
But Yusuf argued that in the long term, competition would reinvigorate the industry.