Morocco: Life insurance expected to become more important as a savings vehicle
Source: Middle East Insurance Review | Jun 2021
Savings in Morocco are forecast to shift increasingly towards life insurance and securities, with the focus away from bank deposits.
At present, bank deposits command 87% of total savings in the country of more than MAD800bn ($90.3bn). This is the total financial wealth of households in Morocco apart from real estate, with 11% goes to life insurance (MAD87bn) and 7% to securities (MAD60bn), according to local media reports.
Wafa Assurance Morocco deputy general manager in charge of the personal life division Driss Maghraoui said, “This distribution will change in the years to come in favour of life insurance and securities.
“There will be no cannibalisation, but a modification in the physiognomy while having growth in the three segments. We are at the beginning of the story compared to a mature market like France where 40% of savings are concentrated in life insurance plans, against 30% for bank deposits and 30% for securities.”
Mr Maghraoui predicts that Morocco “will soon have 60% of savings in bank deposits, 20% in life insurance and 20% in securities”. This development can be attributed mainly to the drop in the yield provided by term deposits and passbook accounts, following, in particular, the reduction in the key rate, which currently stands at 1.5% after two successive cuts of 25 basis points and 50 basis points, respectively, in March and June 2020.
The gradual change in the profile of the saver, the spurt in digital transformation, and financial education will accelerate this migration from bank deposits. M