The growth in the insurance industry in Morocco is insufficient for all intermediaries, a large number of whom are heavily dependent on the motor branch and monitor their commission income closely, indicated Mr Farid Bensaid, president of the National Federation of Insurance Agents and Brokers (FNACAM).
According to data presented by Mr Abderrahim Chaffai, President of the Supervisory Authority of Insurance and Social Insurance (ACAPS), the motor branch commands 75% of the portfolio of intermediaries, who account for 56% of motor insurance distribution. Developing other coverage areas is therefore a major commercial challenge for the intermediary network.
Both industry leaders were speaking at the 10th annual meeting of FNACAM on 8 October. The conference’s theme was "Reinventing Intermediation in the Face of Tomorrow's Risks".
Mr Bensaid noted that the market comprises 2,154 intermediaries, comprising 1,624 agents and 530 brokers. He presented statistics, showing that 68% of agents earn less than MAD1m ($103,000) in annual commissions.
From a financial perspective, the situation remains mixed depending on the size of the intermediary firm, its specialisation, and its status as an agent or broker. Many smaller firms struggle to achieve profitability. They need to invest in information systems, maintain local offices and recruit qualified staff.
Since the profession is no longer simply a "mailbox" operation and has instead adopted an advisory function, it requires investments that would need a certain volume of business to recoup. To address this, FNACAM is seeking new revenue streams, such as the money transfer services offered for the past two years (Cash Plus, Wafacash, etc).
It is negotiating more attractive commission rates with the Moroccan Insurance Federation (FMA). Currently, the average commission rate in Morocco fluctuates between 3% and 15% (averaging around 10%), which remains low considering the additional management and advisory tasks now handled by the intermediary and the rising costs of operations.