The insurance market is expected to show a decline in premiums by around 8% in 2017, according to the CEO of Alliance Insurance, Mr Hassen Khelifati.
In a radio interview last month, Mr Khelifati indicated that he based his estimate on the amount of life and non-life premiums collected by insurers during the first semester, which stood at DZD69.9 billion (US$604.6 million), including international acceptances, down by 3.2 % compared to the first half of 2016.
He said that if the 1H downward trend was confirmed during the last six months of the year, the decline would be 8% for the whole year, according to a report in Emerging Maghreb. In comparison, the Algerian insurance market posted a 2.4% y-o-y growth in premiums to DZD133.9 billion (including international acceptances) in 2016, data from the National Insurance Council show.
The downtrend in the market is attributed to current economic conditions, a fall in vehicle imports and lower demand for property insurance.
To boost the insurance market and to pull it out of the slump, several proposals have been made by industry players concerning products such as takaful, microinsurance, co-insurance, and credit insurance.
Apart from the decline in turnover, the insurance sector is facing other challenges especially in the absence of an independent authority responsible for controlling public insurance companies, a view held for some time by several industry players.
Mr Khelifati said that the Ministry of Finance controls and holds the shares of public insurance companies, adding that this situation does not help market players. These same players in the insurance sector have made several proposals to the commission in charge of preparing a draft law governing insurance that will be submitted to the government for approval and then presented to Parliament in the coming months.
The insurance sector only contributes 0.7% to the country’s GDP, a ratio which is considered very low in comparison with those in neighbouring countries and the potential of the domestic market. M
DZD100 = US$0.86