French insurer AXA’s two units in Algeria have turned profitable after five years of operations, thanks to a targeted development strategy put in place by the company’s management, including control of expenses, while continuing to promote team development and product offerings.
AXA Assurances Algeria P&C posted a turnover of DZD2.6 billion (US$23.4 million) in 2016, up 3% more y-o-y. AXA Assurances Algeria Life had a turnover of DZD1.5 billion, 20% more compared to 2015. The aggregate turnover in Algeria in 2016 grew by 9% y-o-y to DZD4.1 billion, faster than the 1.9% increase for the overall insurance market.
Mr Pierre Vasserot, CEO of AXA Assurances Algeria, said at a media briefing that the two units had in 2016 become profitable, the first profits they had made since AXA began operations five years ago in the North African country. He refuted media reports that surfaced in August that the company had reported huge losses for 2016.
In the coming months, AXA, which employs nearly 500 people in Algeria, intends to strengthen its network of branches, which currently number 72. The company plans to open four branches each year. Growth will be contributed too by AXA Life which won a group contract last December from the state energy producer Sonatrach Group. The contract with Sonatrach “will make the company Number One or Number Two” in the life market, Mr Vasserot said.
“We are here for the long term, and our strategy is based on investment for future profitability,” he said. The Algerian insurance market has enormous potential, especially among small companies whose takeup of insurance is still low.
Mr Vasserot added: “We will have a new headquarters that will be operational from 2018 to group all our teams which are currently spread over four places in Algiers.”
The capital of AXA Algeria is divided among three shareholders: the AXA Group (49%), the National Investment Fund (36%) and the Algerian External Bank (15%).
AXA Algeria has also launched a study among 600 small and medium-sized enterprises in the country to help it develop products suitable for such businesses. “We are present among large companies. On the other hand, among SMEs with 10 to 20 employees, we are not sufficiently present,” Mr Vasserot said, explaining that there is room for business in the SME segment. M
DZD10 = US$0.09