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Dec 2022

Morocco: Insurers' counterparty risk remains under control

Source: Middle East Insurance Review | Sep 2022

The counterparty risk of insurers in Morocco is under control, according to the central bank, Bank Al-Maghrib, in its annual Financial Stability Report for 2021.
At the end of 2021, the share of assignees in technical provisions reached MAD10bn ($976.6m), up by 1.8% compared to 2020.
A portion of the ceded commitment was covered by deposits with cedants which were estimated at MAD3.4bn and represented 35.1% of the total cessions.
The remainder of the ceded commitment was split between national and international reinsurers as follows:
  • National reinsurers held a share of the commitment amounting to MAD5.9bn, of which MAD2.9bn were under cessions backed by state guarantees. The retrocession programmes of national reinsurers were mainly ceded to reinsurers with a rating of ‘BBB ‘and above.
  • Foreign reinsurers account for a share of the commitment amounting to MAD655.5m. Almost all of these reinsurers have a rating of ‘BBB’ and above.
According to the report, counterparty risk vis-à-vis insurance intermediaries and policyholders also improved in 2021.
The ratio measuring the counterparty risk vis-à-vis insurance intermediaries stood at 3.2% compared to 5.5% in 2020. This improvement was the result of a reduction in receivables from insurance intermediaries, combined with a simultaneous increase in the level of provisioning by 26.5% as well as an increase in shareholders’ equity of insurance companies by 2.9%.
For the same reasons, counterparty risk vis-à-vis policyholders has also decreased. The ratio measuring this risk fell from 4.5% to 3.7% in 2021. M 
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