S&P sees long-term growth potential for Maghreb insurers
Credit rating agency Standard & Poor's has just published a new report forecasting long-term growth for insurers in the Maghreb region of North Africa.Credit rating agency Standard & Poor's (S&P) has just published a new report forecasting long-term growth for insurers in the Maghreb region of North Africa.
"Markets are likely to advance on the back of mounting needs for life and savings products and demand for personal lines of business, like home property and health, which remain either untapped or underdeveloped. In addition, developing infrastructure and government efforts to increase insurance penetration are likely to support premium volumes in the coming years", says the rating agency.
The challenge for North African companies is to widen the offer while maintaining profitability.
S&P believes government efforts to promote the insurance and regulate the sector are particularly beneficial to the development of the market.
Algeria, in particular, has the biggest growth potential given that the penetration rate of insurance is still low at 0.8 percent of the Gross Domestic Product (GDP). S&P thinks bank insurance growth will boost the country's sector in the coming years.
Morocco is the second-largest insurance market in Africa with €1.96 billion in premiums in 2010 and a penetration rate of 2.8 percent.
The government launched a development programme focusing on the sector in 2011 introducing tax benefits to promote savings and long-term products such as life insurance, La Tribune newspaper reports.
Finally, in Tunisia, which has a penetration rate of 1.8 percent, the insurance growth outlook is better than the GDP forecast.
The regulator has recently introduced additional benefits for Islamic insurance compatibles companies and has also introduced compulsory insurance.