Algeria: Insurers hit by debts owed by paralysed industrial groups
Source: Middle East Insurance Review | Nov 2019
Insurers have been hard hit by the financial and business crisis that has affected major industrial groups whose key executives are in jail.
Mr Hassen Khelifati, CEO of Alliance Assurances and vice president of the Algerian Union of Insurance and Reinsurance Companies (UAR) said Algerian insurers must recover debts estimated at DZD20bn ($166m) from 11 industrial groups, according to local media reports. He said the debt could depress activity in the insurance sector. The bulk of the debt is owed by the construction group ETRHB which is owned by tycoon Ali Haddad.
Mr Khelifati also revealed that turnover in the insurance market has decreased by DZD10bn.
In comparison, the Algerian insurance market grew marginally at 2.2% with a turnover of DZD142.6bn in 2018 compared to 2017, according to the National Council of Insurance (CNA).
Since mass protests led to the resignation of Algerian president Abdelaziz Bouteflika in April, the authorities have jailed several tycoons seen as close to Mr Bouteflika and are investigating them for corruption.
The jailed tycoons are from ETRHB, KouGC group, Tahkout, and CIMA Motors which have interests in sectors ranging from sugar to motor vehicles. The groups are almost paralysed as their management struggle to pay salaries or import goods as company bank accounts have been frozen. Thousands of jobs in the Algerian economy are at threat.
Furthermore, the interim government has held back planned reforms, initiated towards the end of Mr Bouteflika’s 20-year rule, to wind down subsidies, open the economy to investment and create jobs outside bloated public services, reported Reuters. M
DZD10 = $0.08