Takaful is gaining ground in Algeria with expectations to increase its share of the insurance market thanks to growing demand boosted by the benefits introduced by the 2024 finance law.
Professionals in the sector are counting on an increase in the market share of takaful from 1% currently to 5% in the medium term, by focusing on online takaful services in particular, reported Algeria Press Service (APS).
In recent years, takaful, general and family, has recorded notable growth thanks to the creation of two specialised companies, namely El-Djazair Takaful and El-Djazair El-Moutahida Family Takaful. They join Salama Assurances and Société Générale Assurance Méditerranéenne (GAM). Salama started offering takaful services in 2021 before the promulgation of the 2024 finance law. GAM opened the first takaful window in Algeria in 2022.
El-Djazair El-Moutahida Family Takaful CEO Chakib Kacimi El-Hassani told APS that the tax measures contained in the 2024 finance law in favour of takaful allow this branch to develop and thus benefit from favourable financial and management incentives in this start-up phase.
He said that the development of takaful so far was due to the educational and publicity efforts of insurance companies, as well as work carried out by banks to encourage the switch to takaful products.
El-Djazair Takaful CEO Mahfoud Ziane Bouziane said that the prospects for takaful in Algeria are ‘promising’ thanks to the dynamics experienced by Islamic finance and to the growth of the automobile industry in Algeria.
He added that the company was preparing for the launch of an online platform, which would allow customers to inquire about the different insurance products offered by El-Djazair Takaful and to buy takaful policies.
Last month, the National Insurance Council (CNA) announced that the Algerian insurance market has posted a turnover, including international acceptances, of around DZD169.6bn ($1.26bn) in 2023, an increase of 3.5% over 2022.
Takaful saw gross contributions jump by 343% to DZD214.8m in 2023. Of this total, general takaful accounted for DZD129.6m while family takaful chalked up contributions of DZD85.2m.
Reinsurance, in terms of international acceptances, increased by 8.7% to DZD7.4bn in 2023, representing 4.4% of the insurance industry. Retakaful appeared for the first time in the CNA statistics, showing premiums amounting to DZD80.5m in 2023. M