Interview: Mohamed Hassan Bensalah
Which market niches do you anticipate will be major catalysts for growth in the insurance sector in 2014?
MOHAMED HASSAN BENSALAH: In the insurance sector, market trends vary little from one year to the next unless there has been a major regulatory change that has accelerated the development of a specific branch. For example, major catalysts for growth will be life and health insurance, along with workers’ compensation and car insurance, which have enjoyed average growth of 6% over the past five years. Corporate risks will keep growing with the development of the Moroccan industrial system and the efforts made by the sector to improve the penetration rate of these products.
What kind of impact will the government’s development strategy have on penetration rates?
BENSALAH: The development of the government’s mandatory insurance programme has been slower than initially expected due primarily to a shift in the political context. Without a strong commitment from the government, the programme cannot be achieved, although there have been improvements on questions such as compulsory insurance for construction-related risks. When all the measures included in the mandatory insurance programme are implemented, we will see notable growth in penetration rates. Nevertheless, Morocco already ranks first in the Arab world, as penetration rates reached 3% for the first time in 2012.
How would you evaluate the major challenges for insurers aiming to comply with Solvency II?
BENSALAH: Morocco boasts a modern regulatory framework that is close to European standards. However, European countries are currently preparing for new standards, namely Solvency II, which takes into account additional risk factors in solvency calculation beyond the ordinary subscription-related ones. Most important of all is risk related to financial markets that may oblige insurers to lower their exposure in the share sector. In Morocco, insurance companies are well provisioned and comfortably cover the required solvency margin. A convergence to the new European norm will urge them to reconfigure the structure of their assets, which might affect the financing of the national economy. Introducing these changes to the Moroccan market poses a challenge not only to our sector but also to our economy as a whole. We are all aware of this and will take the necessary time to build our own norms, taking the specificities of our economy into account.
To what extent can awareness about insurance be raised among consumers in rural areas?
BENSALAH: The insurance sector has evolved, and players are working in the best interest of both subscribers and recipients of benefits. However, there is still a way to go to build knowledge among the general public about the products we offer and the benefits they can take from them. This will depend on communication, as well as the efficiency of our distribution system in reaching low-income and rural populations by offering services tailored to their needs and financial means. It is difficult to rate the potential for growth in the micro-insurance segment, whose success has been based on the interaction between the network of distribution, premium collections and a well-adapted product offer. Today, it is limited to death cover.
How should the distribution of insurance products evolve in the next few years?
BENSALAH: In the next few years, the distribution of the insurance products should be endorsed by the conventional network of agents and brokers. Several sales points have opened over the past five years and contributed to greater national coverage, contributing to improving the insurance penetration rate. The banking network will offer savings plans and health insurance schemes which will keep accounting for a strong percentage of their life insurance collection. They are also better equipped than conventional networks for this kind of products. Online sales should also increase.
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