Algeria: Sector expects anaemic conditions this year
Source: Middle East Insurance Review | Mar 2020
For Algeria’s insurance industry as a whole, 2019 was a year without growth, Mr Hassen Khelifati, CEO of Alliance Assurances, has said, adding that this was so even as his company managed to increase its turnover by 4%.
The past year has been marked by a general lack of economic reform, he said in an interview with TSA Algeria. Furthermore, unfair practices such as cutthroat pricing and the exclusion of private companies from major markets continued. In addition, imports of automobiles were blocked, affecting business in the insurance sector which derives more than half of its revenue from the motor branch.
At the moment, prospects for this year do not look much better than the performance in 2019 since preliminary results for the month of January seem to indicate that activity in the insurance sector is down by almost 10% compared to January 2019, Mr Khelifati said. He attributed this to the pollution tax introduced through the 2020 finance law.
Local insurers, despite their objections, are responsible for collecting this tax on behalf of the Treasury. Unfortunately, the tax, which artificially inflates the auto insurance bill, pushes policyholders to turn to policies with lower premiums and forgoing some covers, he said.
Mr Khelifati repeated a request of the insurance industry since the pollution tax was announced, “We drew the attention of the public authorities to this risk by demanding either the repeal of this tax or its direct collection by the tax administration.”
For the moment, the request has remained unanswered and insurers continue to collect the tax without being remunerated for doing the work. M