Although policy penetration levels in Tunisia are low by international standards, overall premiums are growing steadily and the life segment is expanding quickly, as are fresh niches such as takaful ( Islamic insurance ) and micro-insurance. The industry regulator is besides working on a number of reforms to bolster sector development, including changes in the rules on pricing compulsory third-party indebtedness car indemnity, which is among the largest product lines sold in the nation but is presently loss-making .

Overall Premiums & Growth

tunisian indemnity firms ( excluding reinsurer Tunis Re ) sold total premiums of TD1.56bn ( €715.4m ) in 2014 according to latest available data from industry representative body the Fédération Tunisienne des Sociétés five hundred ’ Assurances ( FTUSA ), astir from TD1.41bn ( €646.6m ) the previous year, an addition of 10.2 %. This was broadly in line with emergence over the medium term. Premiums grew at a compound annual growth rate ( CAGR ) of approximately 9 % over the five-year period between 2009 and 2014. Figures for the grocery store as a whole in 2015 were not available at the time of writing ; however, the country ’ randomness largest insurance company by premiums STAR Assurances saw premium growth of 7 % over the course of the year, according to preliminary figures filed with the Tunis Stock Exchange, down from 11.2 % in 2014, while reinsurer Tunis Re saw a contraction in premiums for the class, suggesting that growth may have slowed down compared to 2014 levels .
Rym Gargouri, analyst at tunisian stock brokerage Tunisie Valeurs, told OBG she believed that the sector would continue to expand at a like pace to the recent past in coming years, though she added that in the short term emergence rates could fall to around 5 % due to what she described as a slowdown in investment and the wide economy .

Global Position & Penetration

swiss Re Sigma ’ s “ World Insurance in 2014 ” report card ranked Tunisia as the ninth-largest insurance marketplace in Africa ( out of 10 for which datum is given ), based on entire premiums of $ 888m, and the 80th-biggest in the global. The firm put penetration – measured as a proportion of premiums to GDP – at 1.8 %, roughly in agate line with the MENA average of around 1.6 % and the second-highest proportion for north african countries, behind Morocco at 3.2 % and ahead of Algeria and Egypt at 0.7 % each.

penetration levels were besides the sixth-highest of the african countries for which data is provided by the Sigma report and the 65th-highest charge worldwide. Per caput premiums were worth $ 80, again behind Morocco ( on $ 102 ) but ahead of Algeria and Egypt ( at $ 40 and $ 24, respectively ), and ranking the country fifth in Africa and 71st in the universe .

market Players

There are 23 onshore insurance companies in Tunisia, including four reciprocal companies. Of the full, 13 are conventional renaissance man or non-life insurers, while five are dedicated life insurers ( four of these are sister companies or subsidiaries of non-life firms, while one is an affiliate of a local anesthetic bank ), one is an export credit insurance company, one a reinsurer and three are takaful providers. Six offshore insurance firms besides operate out of the country .
diligence observers view the market as overcrowded. Gargouri described it as highly fragmented, while Mohamed Ali Jebira, partner at Deloitte Tunisia, told OBG that there were excessively many indemnity firms for the size of the country. “ Around a twelve firms have captured most market partake, while the remainder are modest and struggling to grow, ” he said. Despite this, industry consolidation does not appear to be on the cards. “ many indemnity firms belong to banks or family-owned conglomerates, which means they are improbable to merge with other insurers, ” Jebira said .
STAR Assurances is the largest fast by premiums, with an inshore market share ( excluding business written by Tunis Re ) of 18.5 % in 2014 ( the latest year for which fully market data is available ) according to FTUSA figures. french policy group Groupama owns a 35 % stake in the firm, the tunisian state a 38.6 % plowshare and submit anoint company Entreprise Tunisienne five hundred ’ Activités Pétrolières a 19.02 % stake. The tauten collected premiums worth TD309.5m ( €141.9m ) in 2015, up 7 % on TD289.3m ( €132.7m ) the previous year. Some 98 % of this upset came from non-life lines. In May 2015 the firm launched a five-year strategy focused on growing its animation, agrarian and small and medium-sized enterprise lines .
In second locate is Compagnie Méditerranéenne five hundred ’ Assurances et de Réassurances ( COMAR ), with a 10.1 % market parcel in 2014. The tauten is part of the Amen Group, which is controlled by Tunisia ’ s Ben Yedder family through holding company PGI, as is baby life insurance firm Hayett Insurance, which had a market share of 2 % in 2014. The third-largest firm is GAT, with an 8.5 % marketplace parcel. The firm – whose liveliness insurance auxiliary, GAT Vie ( once Amina Assurance ) has a 0.5 % market share – is majority-owned by local firm Maghreb Participation Holding, part of the Mabrouk Group conglomerate .

Car Insurance

car policy premiums stood at TD706.9m ( €324.2m ) in 2014, equivalent to 45.4 % of sum premiums, making this segment by far the largest insurance channel in the area. This was thanks in bombastic part to third-party liability cable car indemnity ’ sulfur condition as the lone major mandate indemnity line. Premiums were improving by 10.2 % year-on-year, from TD641.5m ( €294.2m ) in 2013, and by a CAGR of just under 8 % between 2009 and 2014, slightly ahead of the 7.5 % registered by the non-life segment as a hale. STAR was the largest player in the segment, with a marketplace contribution of 21.8 % according to FTUSA figures, six percentage points ahead of its nearest rival. The three largest firms in the segment accounted for good under half of premiums ( 49.2 % ) .
Premiums in the section, which are heavily regulated, appear set to rise in issue forth years, following a decision by sector governor the General Committee on Insurance ( Comité Général des Assurances, CGA ) in April 2015 to raise the premiums for compulsory liability policy by 10 %. subsequently that class the CGA announced it would continue with exchangeable raises over the coming five years ( see analysis ) .

other Non-Life Lines

After car indemnity premiums, the future largest non-life insurance segment is group health policy, which accounted for 14 % of entire policy premiums in 2014 and grew at a CAGR of fair over 8 % between 2009 and 2014. however, Gargouri said that despite goodly growth rates, the segment was presently hush loss-making. “ Group aesculapian insurance brings in a lot of premiums but besides has a senior high school claims rate and is struggling to reach profitableness, ” she told OBG, adding that companies were presently reviewing their prices in an campaign to improve the situation .
STAR again is the largest player in the group checkup insurance segment, with a 2014 market share of 34.2 %, while the top three firms ( STAR in concert with Maghrebia and GAT ) accounted for 59.8 % of medical premiums. In third base place is the many-sided risks segment, with a 2014 grocery store partake of 9.4 %, while fire insurance accounted for 6.9 % of premiums and transport insurance for 4.7 % .

Life Insurance

Although life indemnity dollar volume remains much smaller than its non-life counterpart, the life lines are growing much faster. Premiums in the segment grew by a CAGR of approximately 15 % between 2009 and 2014 ( leading to a doubling in total premiums over the time period ), compared to 7.5 % for the non-life segment. Life premiums grew by an even stronger 22.1 % in 2014, the latest class for which data is available. “ Life insurance offers huge electric potential for growth but the products need to be simplified and the benefits highlighted to make it more attractive for likely customers, ” Mohamed Dkhili, CEO of GAT Assurances, told OBG .
much of the business in the segment comes from life policies taken out to cover deposit loans, and its late growth is probable to have been driven to a substantial extent by retail lend, which besides grew at approximately 15 % a year in the five years to 2014. Gargouri told OBG that the segment would likely remain the main driver of industry growth in come years – capitalization products, she said, are likely to expand particularly quickly. Government proposals to reform the nation ’ randomness state pensions organization could likewise present significant opportunities for emergence in the savings section in the future .
however, industry figures say that the prospects for some other animation products are less good. “ Life insurance international relations and security network ’ thyroxine working well outside of bancassurance products, ” Jebira told OBG. “ It is partially a cultural write out and because insurance firms aren ’ t investing enough in commercialize and communication, ” he said, adding that few firms had marketing or public relations departments. “ The development of takaful may help with the cultural aspects of the trouble, but there remains a necessitate for firms to invest more in marketing their products, ” he continued .
There are five dedicated life insurers presently operating in the state, namely Attijari Assurances, Carte Vie, GAT Vie, Hayett and Maghrebia Vie, which when taken together held a 54.1 % share of the life sentence policy market in 2014 ( unlike in some markets such as neighbouring Algeria, renaissance man firms are besides allowed to sell life indemnity ) .
Attijari was the largest of the five in 2014, on premiums of TD40.4m ( €18.5m ), equivalent to 2.6 % of entire insurance premiums and 15 % of total biography insurance premiums for the year, despite only having begun operating in late 2012. The firm is a subsidiary company of local depository financial institution Attijari, which in turn is region of Moroccan fiscal group Attijariwafa Bank .
The early four dedicate liveliness indemnity companies are all subsidiaries or sister companies of the non-life indemnity firms. The largest of them, Maghrebia Vie ( just behind Attijari on 2014 premiums of TD39.4m, or €18.1m ), is depart of local conglomerate the UFI Group, which besides owns general insurance company Maghrebia, the fifth-largest insurance company in the country with a 2014 market share of 7.7 %. Astree had the largest life business among the renaissance man firms ( coming in fifth place overall in the life segment ), with a market contribution of 8.7 % in this intersection line .

reinsurance

The cession rate – the proportion of premiums taken in by tunisian policy companies transferred to reinsurers – stood at 22.48 % ( equivalent to TD346.2m, €158.8m ) in 2014, polish slenderly from 23.34 % ( equivalent to TD326.2m, or €150m ) in 2013, according to figures reported by the FTUSA. Fire insurance premiums had the highest cession rate, at 76.8 %, while group health insurance had the lowest, at 2.7 %. overall policy companies made a loss on reinsure risks ( reinsurance premiums minus reinsurance claims ) of TD133m ( €61m ) in 2014, a 27.5 % increase year-on-year .
The sole dedicated national reinsurer is Tunis Re, whose major shareholders include local savings bank Banque Nationale Agricole with a 16.3 % stake and insurers STAR and COMAR ( with stakes of 14.6 % and 11.6 %, respectively ). The tunisian country besides has a 5.2 % interest in the company. In June 2015 the firm increased its capital from TD75m ( €34.4m ) to TD100m ( €45.9m ) through a parcel offering to existing shareholders. Tunis Re ’ s tied of premiums reached 3 % in 2015 .
Since 2009 the firm has posted premiums growth at a CAGR of just under 10 %. The tauten is active in both Tunisia and overseas, primarily in other north african markets and in West Africa ; some 37 % of its premiums were issued abroad. Fire insurance made up the largest share of its employee turnover by branch, at 33 % of the sum. conventional indemnity firms brought in a total of TD16.1m ( €7.4m ) worth of reinsurance premiums for the year, a 6.5 % increase on 2013 figures.

According to Mustapha Kotrane, director at Tunis Re, the expectation for the market in 2016 was healthy. “ Demand should grow as respective major projects such as the Tunis Sports City real estate of the realm development may restart, ” he told OBG ( see real Estate chapter ). “ And while the tourism commercialize is unlikely to amply recover, the site will credibly improve compared to 2015. ” He added that the prospects for alien investment were besides good, but that competition in the local reinsurance commercialize as potent and growing. “ There is competition from both mega-reinsurers in Europe vitamin a well as regional reinsurers from the Middle East and Africa, who are increasingly developing a presence in Tunisia, ” he told OBG .

Claims & Profitability

The FTUSA put the total value of insurance claims at TD840m ( €385.2m ) for 2014, polish from TD849.2m ( €389.4m ) the previous class. Car insurance claims accounted for the majority ( 54.6 % ) of the sum. diligence profits ( before taxes ), meanwhile, stood at TD106.8m ( €49m ) in 2014, up 29.5 % on 2013. The sector made an underwrite loss ( premium subtraction claims and outlays such as management costs ) of TD26.3m ( €12.1m ), but reached profitableness thanks to returns on its investments. “ Underwriting profits are broken because of high claims ratios and the fact that not all companies are well-provisioned. however, some firms such as STAR have been working on improving their cover returns, ” Gargouri said .
Profits in the non-life segment fell following the 2011 rotation, from TD89.6m ( €41.1m ) in 2010 to TD26.9m ( €12.3m ) in 2011. The main causes were downturns in the car insurance segment ( profits fell from TD42.5m, €19.5m, in 2010 to a passing of TD14.6m, €6.7m, in 2011 ) and the fire and many-sided risks segment ( in which technical profits fell from TD41.1m, €18.8m, to TD21.5m, €9.9m ), american samoa well as a rise in claims from TD64.4m ( €29.5m ) to TD132.1m ( €60.6m ). Results were subdued in 2012 as well. however, both segments recovered by 2013, when the cable car segment returned to profitableness ( of TD15.9m, €7.3m ) and fire and many-sided risk returns rose on their pre-revolution design ( to TD47.8m, €21.9m ), bringing overall non-life results to TD63.4m ( €29.1 ). By 2014 total non-life profits stood at TD94.3m ( €43.2m ), while life profits hit TD27.3m ( €12.5m ) .

distribution Channels

As of 2013 there were 918 indemnity agents operating in the area deoxyadenosine monophosphate well 82 brokers, according to latest available CGA figures. Bancassurance has become commonplace, and is frequently used in particular for selling life insurance policies to cover bank loans .
however, some diligence figures say the channel is not working arsenic well as it should in other areas. Habib Ben Hassine, CEO of Maghrebia Vie, told the Middle East Insurance Review in May 2015 that even with bancassurance agreements in position, banks are often loath to sell life insurance policies on commission for fear of competing with their own savings products – a tendency that may help to explain Attijari ’ s rapid emergence as the area ’ s largest dedicated life insurance company, given its ownership by a bank .
meanwhile, selling insurance via the internet has therefore far not taken off. “ Companies have not truly addressed the internet as a distribution tool at all so far, ” Jebira said, adding that there was besides a miss of price comparison websites. “ There are only two noteworthy sites, and the larger of the two entirely deals with a few companies and can not truly be classed as a full comparison site, ” he told OBG .

Islamic policy

There are three takaful insurance operators in the state, namely Zitouna Takaful, El Amana Takaful and At-Takafulia. The sector is small but growing quickly : the three firms sold combined premiums of TD29.1m ( €13.3m ) in 2014 ( equivalent to 1.9 % of sum premiums bulk ), up from TD8.93m ( €4.1m ) the previous year, and El Amana and Zitouna were in the exceed three fastest-growing policy firms for the class ( At-Takafulia did not qualify as it started operating during 2014 ) .
The year 2014 saw the passage of a law amending the insurance code to provide a regulative model for the segment, which should help its expansion. only consecrated takaful firms are allowed to offer the merchandise, with conventional insurers forbidden from opening Islamic windows .
As a result, some insurers have taken stakes in disjoined takaful companies. This rule, however, does not apply to reinsurers, and Tunis Re has offered a retakaful window since 2011 and took premiums of TD5.8m ( €2.7m ) in 2015, up 33.9 % on its 2014 figure. “ The retakaful business is going well, as takaful firms prefer to use retakaful for their reinsurance to avoid losing clients, ” Kotrane said .
Zitouna is the largest of the three Islamic insurers by bounty volumes, on a total of TD19.3m ( €8.9m ) in 2014. The firm is a sister company of the Islamic bank of the same name, which was formally launched in 2013, as function of the Zitouna Holding tauten. The group, which was once known as Princesse Holding and was established by Mohamed Sakher El Materi, the son-in-law of former president of the united states Zine El Abidine Ben Ali, was confiscated by the authorities following the 2011 revolution and remains in the hands of government-backed holding firm Al Karama .
The moment largest of the three is El Amana Takaful, which was launched in 2013 and had premiums of TD5.29m ( €2.4m ) in 2014, equivalent to 18 % of the three firms ’ combined premiums. The firm is a joint guess between several Tunisian conventional insurers ( namely COMAR, Carte, Astree and Tunis Re ) and the Saudi Arabian group Dellah El Baraka, which besides owns tunisian Islamic bank El Baraka and leasing firm Best Lease. The smallest of the three – which is besides the youngest, having begun operating in early 2014 – is Assurances At-Takafulia, which is itself a joint venture between several Tunisian fiscal institutions ( insurers Salim, Star, CTAMA, AMI, MAE and Tunis Re, and local bank Stusid Banque ) and a foreign spouse, namely the jordanian Islamic Insurance Company. The ship’s company sold some TD4.5m ( €2.1m ) worth of premiums in 2014, equivalent to about 15 % of the three firms ’ combined premiums .
Jebira told OBG that the segment was highly bright, not entirely because of the solicitation of sharia-compliant products to some customers but because the youthful firms in the segment have started work with a mentality different from that in much of the diligence. “ Until recently policy firms tended not to be very customer-oriented, and while this has started to change, takaful firms have been strongly oriented towards clients from the start and are taking more and more marketplace share as a resultant role, in especial as regards life insurance, ” he said, adding that prices from both takaful and indemnity firms are exchangeable .
Gargouri said that while she thought that the sector would likely continue to grow, it would take time for it to reach its potential entire likely .
“ There was a draw of buzz surrounding takaful when it was first launched and it has grown quickly, and there is besides demand for sharia-compliant policy products. however, the section is reliant in partially on the development of the Islamic bank sector, which is experiencing some difficulties such as finding Islamic refinance, ” she told OBG .

Micro-Insurance

The class 2015 saw launch of Tunisia ’ s first gear micro-insurance inaugural, in the mannequin a micro-bancassurance project between the lender MicroCred and local anesthetic insurance company Carte. In the first example the firm is focusing in particular upon providing life insurance to cover borrowers from the microcredit firm. “ The inaugural has given tunisian micro-entrepreneurs the opportunity to buy insurance for the first time in their lives, at broken premium costs they can afford, ” Hassan Zergouni, president of the board at MicroCred, told OBG .
While the segment has entirely good launched and is in its infancy, Jebira said that the policy sector is working to put in place a regulative framework to encourage its development .

Investments

The value of investments by policy companies stood at TD3.71bn ( €1.7bn ) in 2014, up 11.5 % from TD3.33bn ( €1.5bn ) the previous class, according to FTUSA figures. Companies ’ investing income for the class totalled TD142.5m ( €65.4m ), an increase of 18 % on 2013 figures, for a render of 3.8 %, which helped turn tunisian insurance firms ’ aggregate little cover losses into overall profits.

Bonds accounted for 52.7 % of local anesthetic companies ’ investment portfolio in 2013, according to latest available figures from the CGA, followed by shares ( 22.4 % ), money grocery store and bank deposits ( 14.4 % ), real estate investments ( 6.3 % ) and other assets ( 4.2 % ). The sector is besides an significant actor in local anesthetic fiscal markets. indemnity companies are the second-largest purchasers ( after banks ) of local corporate bonds, accountancy for 24.6 % of subscriptions in 2014 according to data from stock market regulator the Financial Market Council. While the secondary equity market is relatively shoal and attachment transaction levels are very depleted, making trade difficult ( partially because insurance companies themselves prefer to buy and hold bonds ), Gargouri said that local anesthetic adhesiveness issues however provided more than adequate investment opportunities to the sector. “ There are a lot of investment opportunities, as leasing companies and banks frequently issue bonds with maturity periods of up to seven years and at rates of around 7 %, which is attractive, ” she said .
however, she told OBG that the sector would benefit from investing more heavily in shares, and suggested that the regulative model should be modified to encourage this. “ Larger investments by insurance firms in stocks would help to develop the equity grocery store american samoa well as giving them better long-run returns than bonds do, ” she told OBG. In this idle, she described companies as excessively conservative, arguing that they need not be fearful of equity markets ’ higher levels of excitability given the long-run nature of their investments .

expectation

While the life marketplace has been growing promptly in holocene years, abject overall penetration rates present insurance firms with wide-ranging opportunities. “ There is room for growth in all markets, both life and non-life, ” Kotrane said. As the marketplace expands, reforms of mandatary car liability pricing ( see analysis ) should besides help to boost profitableness in the dominant but loss-making segment, allowing firms to invest in less develop areas of the diligence .

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