Morocco: Insurers' arrears up by 7% to $1.2 bln at end-2106
Source: Middle East Insurance Review | Oct 2017
Arrears, mainly premiums, due to insurers by individuals and intermediaries have increased by around 7% to MAD11.3 billion (US$1.2 billion) at the end of 2016 compared to end-2015. The outstanding receivables represent 20% of the insurance sector’s equity.
Overdue receivables from insured persons amounted to MAD6.8 billion at 31 December 2016, up by MAD500 million or 7.3% from 12 months previously, while those due from intermediaries grew by 7% to MAD4.5 billion, reported L’Economiste, citing official data.
The delinquent amounts have an impact on the financial results of insurers. For amounts owing by individuals, insurers must make a provision of 100% for receivables that are outstanding at least 18 months; 50% for debts unpaid for at least 12 months and 25% for debts unpaid for at least nine months.
For arrears outstanding from intermediaries for more than 15 days after the end of the month, a provision of 100% must be made. However, insurers may be exempted from making provisions if they have an appropriate memorandum of understanding with the intermediary.
In addition to facing an increase in overdue receivables, insurers are seeing a surge in redemptions. The amount of redemptions shot up by 67% MAD5.9 billion in 2016. One reason for the surge is that falling bond rates are causing some households to reconsider their investment in life insurance. M
MAD1= US$0.11