The bulk of future forays into other African markets by Moroccan insurers is likely to be greenfield ventures, according to Mr Bachir Baddou, General Manager of the Moroccan Federation of Insurance and Reinsurance Companies.
Moroccan insurers are already present in over 20 African countries and they continue to explore new opportunities on the continent, including entering markets where Moroccan banks are already established, he said in an interview with a financial publication.
He said that some markets on the continent present real opportunities for investment. These are, in general, countries with political stability, an emerging middle class that has purchasing power that allows a certain level of savings.
He said that the main challenge for African insurance companies is to create products that can meet the needs of people and that are priced with small premiums to reach a large segment of customers. However, he added that it is not always easy to find the balance between “low cost” and products that offer adequate safeguards. The other challenge for African insurers is to improve the level of service to give confidence to policyholders and face competition from major global insurers, some of which are already strongly represented in Africa.
Moroccan insurance market
As for the Moroccan insurance industry, he noted that since 2007, life insurance has been the top business branch, representing around 34% of total premiums in 2015 against 31% for auto insurance.
“This is due mainly to the favourable tax framework for long-term savings and especially mandatory life insurance for personal credits,” he said, adding, “I think life insurance still has great growth potential, and this is also the case for comprehensive home insurance and several professional liability covers.”
He also said that disaster insurance, which will become mandatory by law, will also boost insurance business in Morocco.