Morocco: Insurers urged to take a stake in state-owned reinsurer SCR
Source: Middle East Insurance Review | Apr 2018
The Moroccan Minister of Economy and Finance, Mr Mohamed Boussaid, has asked insurers to take a stake in the state-owned reinsurer Société Centrale de Réassurance (SCR).
“This is not a privatisation exercise,” Mr Boussaid said as he invited insurers to buy shares in SCR in February.
Instead, the move represents a restructuring of the capital of SCR, necessary to ensure its sustainability, he explained to Bloomberg. No details have been given of how much the capital of SCR is to be increased nor the stake which private-sector investors are to hold.
Currently, Caisse de Dépot et de Gestion, the state-owned financial institution which manages long-term savings in Morocco, holds a stake of more than 94% in the reinsurer.
Morocco is encouraging insurers to buy a stake in the reinsurer to mitigate the risks the latter faces.
The national reinsurer has been positioning for some years for facultative and international business. Requirements for insurers to cede part of their business to SCR had been removed gradually since 2007 and totally scrapped by 2014.
CAT coverage
In addition, SCR is readying itself for catastrophic risk coverage, reported L’Economiste. Currently, the insurance market is waiting for the implementation of regulations for disaster coverage by a law passed in 2016.
The law fixes the compensation per event at a minimum of MAD2 billion (US$218 million) in the case of a disaster caused by a natural phenomenon and MAD300 million for one due to terrorist acts. Per annum, the global compensation must not be below MAD4 billion for catastrophic events caused by a natural phenomenon and MAD600 million for those caused by “the violent acts of man”, according to the reports. M
MAD1 = US$0.11