Analysts find growth prospects for insurers in the Maghreb region

The insurance sectors in Algeria, Morocco, and Tunisia (collectively referred to as Maghreb) have different characteristics and competitive dynamics. Nevertheless, the three countries’ insurance markets all have favourable growth potential, according to an article published today by Standard & Poor’s Ratings Services. The article, which is titled “Long-term growth prospects look good for the Maghreb Insurance Industry,” says that this growth potential is despite short-term economic uncertainties.

“Our opinion about the region’s insurance market reflects the increasing need for life and health insurance products in those countries as well as some largely underdeveloped personal lines, such as property,” noted Standard & Poor’s credit analyst Samira Mensah. “Mounting needs from the middle class, investment in infrastructure, and regulatory changes to increase insurance penetration constitute the main drivers of our expectations,” he added.

Estimates are for Morocco and Algeria to have moderate economic growth, as these economies are showing positive GDP growth. We believe that growth in insurance premiums will likely outpace regional GDP growth, owing to the currently very low penetration rates. Nevertheless, we still believe that the three markets might confront some hurdles in coming years, such as slow economic recovery in Europe, which is the Maghreb’s main trade partner, as well as political and economic uncertainties in Tunisia.