Morocco: Sector studies measures to curb medium and long-term impact of pandemics
Source: Middle East Insurance Review | Mar 2021
The insurance industry has asked the sector’s regulator, the Supervisory Authority of Insurance and Social Welfare (ACAPS), to look into measures to contain the impact of pandemics over the medium and long term.
Among the moves made, discussions are currently underway on the need to extend the maximum duration of distribution of provisions for profit sharing, currently set at three years only, an insurance source told EcoActu.ma.
The provision for profit sharing helps insurers to deal with financial uncertainties and regulatory constraints. It allows insurers to ‘smoothen’ their annual financial results over several years in order to provide the policyholder with satisfactory benefits over a long period.
The COVID-19 pandemic has caused turnover in the insurance sector to fall, and by extension, both technical and non-technical results. Industry players feel that it is time for the insurance sector to think about a system to cover operating losses.
The ACAPS played the role of firefighter last year in handling the impact of the pandemic by temporarily modifying certain prudential provisions, in particular those relating to financial market risk and default risk. The goal was to help insurance companies maintain their low-cost investment position in terms of capital and provisions and therefore strengthen the resilience of the sector to the shocks caused by COVID-19.
The pandemic has also affected adversely other economic sectors, particularly the tourism sector, where certain risks are not covered by insurance. M