Algeria: Auto insurers lose annual premiums of US$55 mln in price war
Source: Middle East Insurance Review | Jul 2017
Algeria’s motor insurers are losing around DZD6 billion (US$55.4 million) in premiums each year because of a cut-throat price war, estimates Mr Hassen Khelifati, CEO of Alliance Assurances.
Mr Khelifati said that the hundreds of thousands of vehicles imported and produced locally should have boosted the insurers’ turnover, reported Emerging Maghreb.
“But this has not been the case because of the many discounts by insurers, sometimes going up to more than 80%,” he said. The most worrying aspect, he said, is the dumping practised by certain insurers which has been outside of any commercial logic.
Mr Khelifati, who has repeatedly raised this issue in recent years, continues to issue warnings against the risks of insolvency of insurers, some of which would be threatened with a collapse if management standards, in particular those concerning technical reserves, were to be applied.
Some insurers have underprovided for reserves or have not made provisions based on actual average costs.
He said that the regulator, the Insurance Supervisory Commission, should play its role to avoid a collapse of the insurance market. The Commission should look more closely at the balance sheets of insurers.
In 2016, motor premiums fell by 1.4% to DZD65.3 billion, commanding the biggest share of 54.6% of the total market. Non-life insurers generated DZD119.4 billion in premiums last year, a marginal increase of 0.6% compared to 2015. Non-life business accounted for 89.2% of the total market share in 2016. M
DZD1 = US$0.09