Algeria: Insurers owed more than $746m in premiums
Source: Middle East Insurance Review | Jul 2021
Insurance premiums owing by businesses and public institutions to insurers in Algeria are forecast to rise to DZD100bn ($745.6m) in June, from DZD60bn in September 2020, according to a source with the Algerian Union of Insurance and Reinsurance Companies.
The reason for this includes general economic, commercial and industrial stagnation. The impact of the COVID-19 pandemic compounded the pre-existing economic crisis. Algeria, which produces and sells crude oil, has been affected by a global collapse in oil prices, decline in imports and stagnation in investments. On top of these, insurers face challenges such as a halt in the import of cars since 2018. Motor insurance is the biggest branch of insurance business for the country. Travel insurance used to be the second best-selling product for insurers but the pandemic restrictions has led to a halt in travel.
A large number of businesses have become insolvent and their payables to insurance companies remain outstanding.
Meanwhile, French credit insurer Coface has given Algeria a ‘D’ country risk rating, placing the northern African nation among ‘very high risk’ countries and painting its economic and financial prospects to be ‘uncertain’.
Coface said that prospects are gloomy mainly because of the drop in oil revenues since 2014, which was aggravated in 2020 by COVID-19. And for the current year, the recovery is forecast to be modest. The direct consequence of this situation is the continued decline in foreign exchange reserves which fell from nearly $180bn at the end of 2014 to less than $50bn at present. This would in turn lead to the depreciation of the dinar and imported inflation. M