The insurance sector achieved a turnover of MAD35.1 billion (US$3.7 billion) in terms of written premiums in 2016, an increase of 15.4% over the previous year, according to the 2016 Financial Stability Report released recently.
The main contributor to this growth was life insurance, which realised MAD14.3 billion of premiums in 2016, up by 35.4%. This increase was due to the entry into the market of a new player, Mutuelle d’Assurances Chaâbi.
Life insurance continued to grow despite the downward trend in interest rates. It is boosted by the development of bancassurance and the absence of investment alternatives.
The profitability of the insurance sector increased in 2016 by 7.8% with net results reaching MAD3.2 billion (US$337.7 million) against MAD2.9 billion in 2015.
These results arise from a net technical result of MAD5 billion, of which MAD4.1 billion was from non-life insurance. This was despite a decrease in operating margin that was due to a worsening of the claims rate in motor, occupational accident and agricultural insurance.
Automobile insurance, the largest contributor to the non-life sector, saw premiums of MAD9.9 billion in 2016, an increase of 4.6%.
The Moroccan insurance market continued to be dominated by four classes of business, namely: life (40.7% share), motor (28.4%), personal injury and medical/maternity (10.4%), and occupational accident (6.2%). These four classes together accounted for 85% of the total turnover.
For the overall market, the ratio of claims to premiums increased to 69.4% in 2016 against 62.4% in 2015. This increase was due to a worsening claims ratio for automobile, accident and agricultural insurance.
Redemptions increased by 66.7% in 2016 to reach more than MAD5.9 billion against MAD3.6 billion in 2015 and MAD3.3 billion in 2014. This increase could be explained by the abolition of the Solidarity Tax in 2016. Holders of contracts would likely have delayed the repurchase of their contracts until the abolition of the tax, said the report.
The Financial Stability Report is published by the Committee for Coordination and Oversight of Systemic Risks which has representatives from the Insurance Supervisory Authority, the central bank Bank Al-Maghrib and the Capital Markets Authority. M
MAD1 = US$0.11