The Tunisian insurance sector suffers from structural deficiencies and is undergoing a transformation, but it is not lacking in assets and its growth potential remains high.
The sector is undergoing profound changes, with “an increase in competition, a transformation of distribution models, increased digitisation of the customer relationship, more demanding regulations, a multiplication of associated services and pressure to liberalise”, said Mr Ghazi Boulila in a study entitled “Challenges and Opportunities for the Development of the Tunisian Insurance Industry” published in Mac Info, a bulletin of the broker Mac.
These changes will require players in the Tunisian insurance sector to adapt “by renewing their business model and by thoroughly reconsidering their mode of governance, organisation and distribution network”, said Mr Boulila.
The Tunisian insurance sector remains dominated by motor business, he said. Other classes of business such as life insurance and supplemental pension plans are not well-developed. This weakness is due to the strong sense of solidarity between family members in general and the strong altruistic behaviour of the children towards their parents, he said. These behaviours in fact replace in part life insurance and supplementary pensions because they allow transfers of funds between members of the same family as well as between active young people and their parents.
As a consequence of these structural constraints, the insurance penetration rate and insurance spending per capita are low.
“Almost half of the insurance premium is spent on car insurance and about 16% is reserved for life insurance, of which a large proportion is related to bank loans to individuals,” said Mr Boulila.
Despite these structural deficiencies, which are likely to persist, the Tunisian insurance sector does not lack assets and has a high growth potential to exploit the short and medium terms.
In this context, the researcher has proposed several ways to ensure growth, including to develop life insurance and to improve the image of insurers by reducing excessive compensation delays and cumbersome administrative procedures.
He also suggested to strengthen the traditional distribution network by introducing new information and communication technologies, including digital and the exploitation of the broadband internet channel, mobile and social networks (Facebook, professional network Linkedin, etc).
Lastly, bancassurance can also be developed to consolidate the win-win partnership between banks and insurers. M