For the insurance industry in Algeria as a whole, 2019 was a year without growth, Mr Hassen Khelifati, CEO of Alliance Assurances, has said, adding that this was so even if his company managed to increase its turnover by 4%.
The past year has been marked a general lack of economic reform, he said in an interview with TSA Algeria. Furthermore, unfair practices such as cut throat pricing and the exclusion of private companies from major markets continued. In addition, imports of automobiles were blocked affecting business in the insurance sector which derives more than half of its revenue from the motor branch.
At the moment, prospects for this year do not look much better than the performance in 2019 since preliminary results for the month of January seem to indicate that activity in the insurance sector is down by almost 10% compared to January 2019, Mr Khelifati said. He attributes this to the pollution tax introduced through the 2020 finance law.
Local insurance companies, despite their objections, are responsible for collecting this tax on behalf of the Treasury.
Unfortunately, the tax, which artificially inflates the auto insurance bill, pushes policyholders to turn to policies small premiums and rejecting some covers, he said.
Mr Khelifati repeated a request of the insurance industry since the pollution tax was announced, “We drew the attention of the public authorities to this risk by demanding either the repeal of this tax or its direct collection by the tax administration.”
For the moment, the request has remained unanswered and insurance companies continue to collect the tax without being remunerated for doing the work.
Turning to the economy, he said that Algerian business leaders are rather worried. They generally deplore a lack of visibility about the future of the economy. More specifically, he said, banks seem to have decided to turn off the credit tap because of lawsuits that hit some business executives as well as some banking officials.
Mr Khelifati said, “Our point of view on this issue is based on common sense – just because there are accidents does not mean that we must close the highways.”
He called on the government to send strong signals with the aim of restoring a climate of confidence in the economy.