Morocco's insurance sector continues to show signs of solidity, despite an increase in the loss experience resulting in lower technical results, according to the Committee for Coordination and Surveillance of Systemic Risks (CCSRS) which met on 2 July.
A statement issued by the CCSRS says that the overall annual volume of premiums reached MAD43.1bn ($4.5bn) in 2018, an increase of 6% over 2017. Despite a decline in net income, the return on capital (ROE) remains at a significant 9.4%.
At the prudential level, the CCSRS indicates that the insurance sector continues to maintain a solvency margin in excess of underwriting risk, and well above the regulatory minimum required. These solvency margin surpluses are expected to be reduced significantly with the move towards a prudential risk-based solvency regime.
The CCSRS is composed of the central bank, Bank Al-Maghrib; Moroccan Capital Market Authority (AMMC); Insurance and Social Insurance Supervisory Authority (ACAPS) and the Ministry of Economy and Finance.
Bank al-Maghrib — has announced that the country’s macroeconomic conditions are likely to remain relatively stable. The CCSRS emphasises that macroeconomic risks are generally kept at a moderate level in a national and international context that calls for vigilance.
Banking and capital markets
CCSRS asserts that the Moroccan banking sector has managed to maintain its profitability and consolidate its financial strength thanks to the diversification of its activities at the sectoral and geographical levels. "Concentration risk on large debtors and interest rates to which they are exposed banks continue to be closely monitored, and attention is also given to emerging risks, including cyber risks," said the statement.
In addition, the CCSRS notes that the capital market continues to grow while remaining relatively stable in the first half of 2019, despite moderate increases in long-term stock market and bond market volatility.
At the 2 July meeting, the Committee also approved the Financial Stability Report for the 2018 financial year, analysed the mapping of systemic risks to the financial system and reviewed the progress of the inter-authority roadmap. financial stability for the period 2019-2021.