The Moroccan motor insurance market is facing scrutiny as it is marked by pricing that is practically the same from one insurance company to another, despite an apparently liberalised competitive framework and the number of insurers operating in the market.
The President of the Competition Council, Mr Ahmed Rahhou, said that the lack of price differentiation stems from a mix of structural issues and rigid legal barriers. Currently, the criteria insurers can use to determine premiums are tightly restricted by the Insurance Code, according to a report by Medias24.
“Today, tariff differentiation in motor insurance is restricted by law, notably by the Insurance Code, which is currently being modified," Mr Rahhou said, "We have therefore requested an expansion of the pricing criteria so that there is genuine competition between operators," he added.
Explaining the uniform premium rates, he said, "When an insurance sector fails to distinguish between high-risk and low-risk drivers—or high-accident and low-accident regions—statistical insurance pricing naturally default to a common denominator. As a result, companies end up charging virtually identical rates to everyone in the same target market."
Other factors affect motor insurance pricing. These include high road mortality rates in Morocco and costs tied to fraud and non-payment of premiums by certain agents and insurance brokers. The consumer ultimately bears these costs.
Mr Rahhou asserted that the situation will continue if nothing changes. He said, “We must act on the cost of accidents, on fraud, and on the payment of premiums. We have formulated a whole array of recommendations in our reports, which are today taken up by the Insurance and Social Security Supervisory Authority."