The insurance sector in Morocco registered a turnover of 44.7 MMDH in 2019

The Insurance and Social Security Supervisory Authority (ACAPS) in Morocco recently released its report on the insurance sector for the year 2019. And according to this report, 2019 was marked by an improvement in the main technical and financial indicators of the insurance and reinsurance sector. 

On the technical level, the report points out, direct insurance issues recorded an increase of 8.6% and reinsurance acceptances rose by 5.5%, while the cost of benefits increased by only 4.85%. As for the net result, it reached $600,000 (5.3 MMDH), a strong increase of 20.8%, after the sharp decline of 20.1% recorded in 2018. As for investment, ACAPS indicates that financial investments of insurance and reinsurance companies increased by 6.2% to $21.6 million (195.1 MMDH). They are, all the same, dominated by interest rate assets (48.4%) as well as equity assets (44.6%) and generated, according to the report, revenues up by 8.6% to $1 million (8.9 MMDH). 

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The insurance sector posted a net profit in terms of profitability

In terms of profitability, the sector also posted a net profit (after tax) of $450,000 million (4 MMDH), up 5.2%, thanks to the improvement in operating margin and financial balance. At the same time, the sector’s equity increased by 2.9% to reach $4.66 million (41.3 MMDH), while net profitability consequently improved to 9.6%, compared to 9.4% a year earlier. In terms of solvency, the current ratio shows a slightly improved solvency margin at 396.9% (396.6% in 2018), according to the same source. For its part, the sector’s turnover (written premiums excluding acceptance) shows good growth of 8.6% in 2019. The ACAPS explains in its report that this growth is more marked in Life and Capitalization insurance (+12.5%) than in Non-life insurance (+5.5%).

The report also indicates that the cost of benefits increased by a lesser proportion of 5.7% and reached $3.32 million (29.4 MMDH), against $3.15 million (27.9 MMDH) in 2018.

For its part, the cost of Non-life benefits decreased by 0.6% to $1.85 million (16.4 MMDH), while the cost of Life benefits increased sharply (+14.7%) to $1.47 million (13 MMDH). Technical reserves increased by 7% to $18 million (160 MMDH), the report underlines. “Out of this outstanding amount, Life provisions mobilized 92.9 MMDH, up 10.6%, while Non-life provisions only increased by 2.5% to $7.57 million (67.1 MMDH).” The report also notes a 24% increase in the net technical result which reached $550,000 (4.9 MMDH), with Non-life insurance contributing 3.9 MMDH and Life insurance for $112,000 (1 MMDH).

In addition, Life Insurance and Capitalization maintained its dynamism in 2019, with a 12.5% growth and an inflow of $2.31 million (20.5 MMDH), of which $1.76 million (15.6 MMDH) in respect of individually subscribed contracts. This growth was driven by traditional savings products (support in MAD) which collected $1.83 million (16.2 MMDH), up 10.8% compared to 2018.

In addition, the strongest increase was recorded by unit-linked contracts with a 72.4% growth. Benefits paid to policyholders also recorded a 12.4% increase, reaching $1.4 million (12.3 MMDH). The report notes, in this sense, that surrenders mark the highest increase (16.1%) and continue to dominate Life benefits (74.1%). As for the benefits paid in the form of capital, they show a slight decrease (2.2%) to $200,000 (1.8 MMDH), while the indemnities for claims show a 9.8% increase with an envelope of $124,000 (1.1 MMDH). “Technical operating expenses increased by 8.1% to $200,000 (1.8 MMDH), with a more marked increase in acquisition expenses (10.7%) than in management expenses (5.7%). 

The report notes that the technical reserves of life insurance marked a 10.6% increase, driven by mathematical reserves which recorded a 10% rise to $10 million (89.3 MMDH). The provision for profit-sharing, for its part, shows a strong increase by 17.1%, from $215,000 to $248,000 (1.9 to 2.2 MMDH). The branch’s net technical result increased from $85.7 million (758.8 MMDH) to $113,000 (1 MMDH), thanks in particular to the technical result generated on death insurances $124,000 (1.1 MMDH). Unit-linked contracts closed the year with a net technical loss of $17 million (150.8 MMDH).

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