Algeria: High road accident rate impacts motor business
Source: Middle East Insurance Review | Nov 2017
Algeria Motor
The insurance sector continues to face severe challenges as the number of road traffic accidents has been increasing, while insurance coverage of new cars has plunged following the government’s decision to curb the importation of vehicles last year.
The rise in traffic accidents and the demand for compensation for damage have created great difficulties for insurers in Algeria, which have failed to settle thousands of motor compensation cases due to a lack of funds. Several insurers have not yet processed claims that are more than five years old, reported El Djazair.
The amount of motor claims not yet settled has reached DZD66 billion (US$579.2 million). Motor insurance, the largest class of business in the country, saw premiums decline by 1.4% to DZD65.3 billion last year, accounting for 54.6% of the total market.
To ease difficulties for insurers, the Treasury Department announced last December that increases of 5% in motor tariffs every six months are to be introduced this year, adding up to 20% at the end of the fourth semester. Insurers have started to implement them gradually, beginning in January this year.
More than 400,000 vehicles were imported annually for several years up to 2014. The number imported fell to around 83,000 last year because of the slump in oil prices, vehicle import curbs and Algeria’s bid to promote car production locally. M
DZD10 = US$0.09