Reforms increase competition and expand offerings in Morocco's insurance market


Building on several years of sustained growth, Morocco’s insurance sector is implementing a series of significant reforms that appear set to boost future expansion. New rules have changed key aspects of insurance distribution and established a range of new compulsory products that are set to boost the overall issuance of premiums. In addition, these reforms are expected to expand the country’s product offering, including the creation of a takaful (Islamic insurance) segment. Morocco already has one of the best-developed insurance markets in the region and these changes – bolstered by an increase in competition in the life insurance segment – should help to support sustained sectoral performance over the medium and long term.

Sector Performance

According to figures from the Supervisory Authority of Insurance and Social Welfare (Autorité de Contrôle des Assurances et de la Prévoyance Sociale, ACAPS) – the sector regulator – premiums in the Moroccan market grew by 10.9% in 2017, reaching a value of Dh38.7bn (€3.5bn). Furthermore, the sector achieved a net profit of Dh3.8bn (€342m) in 2017, up 20.2% on 2016. This performance appears to have continued into 2018, with a total of Dh31.2bn (€2.8bn) worth of insurance premiums issued in the first nine months of the year, suggesting that 2018 will exceed the previous year. The growth in premiums in 2017 was positively impacted by the fast expansion in life insurance premiums, which grew by 18.8%.

“The Moroccan insurance sector is driven, to a large extent, by the life segment,” Bachir Baddou, general director of the Moroccan Federation for Insurance and Reinsurance Companies, told OBG. “This is the result of several factors, such as a good connection between banks and insurance companies for the distribution of life insurance products. However, insurance brokers currently only account for a small amount of life insurance premiums.” Despite a slower growth rate, non-life premiums still grew by 5.5% in 2017, accounting for 56.1% of the market, according to ACAPS.

Meanwhile, life insurance accounted for 43.9% of total premiums in 2017, and the share and overall value of the segment appears to be growing. “In the first semester of 2018 life insurance premiums accounted for 41.8% of the sector, which makes us similar to other mature markets,” Baddou told OBG.

The second-most-important component of the Moroccan insurance market is the auto segment, which accounted for 27.1% of total premiums in 2017 at Dh10.5bn (€944m), a 5.3% increase on the previous year. Meanwhile, the share of the auto segment appeared to rise in 2018, reaching 27.9% at Dh8.7bn (€782m) in the first nine months of the year.


Moreover, consumption of insurance products is rising in Morocco, with average expenditure per capita in the country rising on average from $102 in 2016 to $117 in 2017, according to ACAPS. These figures are expected to rise further over the medium term, as new compulsory insurance regulations begin to impact the market. Insurance penetration, or the ratio of premiums underwritten to the country’s GDP, has expanded from 3.2% in 2015 to 3.7% in 2017. This places the country 41st internationally and third in Africa in terms of insurance penetration – following South Africa and Namibia – underscoring the market’s potential for further expansion both domestically and in neighbouring markets.

Moreover, the strong potential for domestic expansion is highlighted by the highly unequal distribution of premiums between the different regions of the country, with 71.1% of total insurance premiums being issued in Casablanca-Settat during the first nine months of 2018, followed by RabatSalé-Kénitra with 10.1%, Marrakech-Safi with 3.8% and the remainder distributed around the country.

Regulatory Oversight

Much of the sector’s evolution over the coming years will be shaped by the implementation of Law No. 59-13, which introduces several significant regulatory changes to the market. The move was part of a broad revamp of Morocco’s insurance legal framework, which began in August 2016 with the long-awaited approval of a new Code des Assurances, or insurance law.

Although the sector was previously overseen by the Insurance and Social Welfare Directorate, a unit of the Ministry of Economy and Finance, the 2016 reforms led to the establishment of a new independent insurance sector watchdog, ACAPS. The new regulator has since been engaged in training and informing insurance brokers about the obligations of firms operating in the sector and customer protection requirements. Nevertheless, other elements of the reform package have taken somewhat longer to be fully implemented. A notable element of this is the development of a regulatory framework for the issuance of takaful products. However, in February 2019 a draft bill for the regulation of the takaful segment was unanimously agreed upon by the House of Representatives, the lower house of the country’s Parliament, and was expected to be voted through by the upper house in early 2019.

Under the new framework, firms seeking to sell sharia-compliant services will have to offer takaful products exclusively, meaning only Islamic banks and new institutions established by conventional issuers will be able to operate in the segment. This move, which is expected to bring greater competition and diversification to the kingdom’s insurance market, will enable products including sharia-compliant life insurance, family insurance, mortgages, and insurance for property damage, accidents and automobiles. As part of the reform of the sector, ACAPS is also working on new solvency rules for insurance companies. This new framework will be based on the EU’s Solvency II model, but with certain adaptations for the Moroccan market.

“Under the new regime, solvency margins will include all risks to which the company is exposed, rather than merely the subscription risk,” Amal Souafi, head of the research department at ACAPS, told OBG. As of early 2019 the regulator was still developing the framework and undertaking discussions with sector operators. “The ongoing change of the prudential rules will imply a change in the way insurance companies manage their funds. There should be a shift from placing money on shares to using more and more obligations, which represent a lower risk,” Abelilah Laamarti, managing director of SANAD assurances, told OBG.

Compulsory Insurance

Growth in the market is likely to be positively impacted by the implementation of three compulsory insurance products, two of which are related to the construction industry, while the third relates to insuring against the consequences of catastrophic events. The mandatory construction insurance consists of all-risk coverage for a contractor’s construction site activities in addition to a decennial insurance covering a contractor’s liabilities should a building collapse within 10 years of its construction.

“These new regulations are important to protect third parties, who are exposed to losing an asset because of someone else,” Baddou told OBG. The latter mandates that insurance providers must include natural catastrophe coverage in wider damage, compulsory motor civil liability and third-party injury civil liability contracts. The move forms part of government efforts to adequately manage and insure against a wide range of natural disasters, such as floods and earthquakes, but also terrorism-related risks. These new provisions were expected to come into effect in early 2019.

“A small insurance premium will be added to all existing contracts, and this is expected to contribute between €60m and €70m to the market in the first year,” Baddou told OBG. “It will be a small increase in a market that has an annual turnover of nearly Dh40bn (€4bn), but it will definitely contribute to an increase in premium volumes.”

Providing sufficient coverage for both natural and man-made catastrophes will be essential to mitigating the economic consequences of such disasters. For example, the floods that hit the kingdom in early 2010 were estimated to cause Dh730m (€65.7m) in damages to transport infrastructure and Dh286m (€25.7m) in housing damages, reducing the country’s total GDP by 0.7%, according to the Moroccan Centre of the Economy, an independent research body. In addition to these new compulsory insurance products, the market is also set to be enhanced by regulatory changes that will enable banks to sell multi-risk home insurance.

New Roadmap

The introduction of compulsory insurance provisions originally formed part of the so-called Contrat-Programme, which provided a roadmap for the development of the sector agreed between the regulatory authorities and local insurance companies in 2011. While these objectives have now been implemented, others have yet to be achieved. Building on the accomplishments of the former roadmap, ACAPS and domestic insurers are seeking to establish a new long-term strategy in order to guide sustained expansion of the sector over the medium to long term.

The emphasis of this new roadmap is expected to be on developing the domestic market through an increased offering and better product marketing rather than further expansion of compulsory insurance. “Today, we need to approach the issue from other perspectives,” Souafi told OBG. “We need to push the sector to innovate and propose new products to customers.”

Market Structure

As of December 2017 the Moroccan insurance market had a total of 23 licensed insurance and reinsurance companies operating in its market. The main market players are connected with the country’s largest banking institutions, which has helped them expand not only in Morocco but also in other regional markets. According to ACAPS, the top-five insurance companies had a 69.6% share of total premiums, while the top-10 firms accounted for 91.5% of the market.

The biggest insurance operator in terms of turnover is Wafa Assurance, which held 20.9% of total premiums according to ACAPS. This included 26.4% of the life insurance segment and 16.6% of non-life segment activity. The firm is a subsidiary of OGM Holding, a part of Attijariwafa financial group. The group is led by the bank of the same name – Morocco’s largest bank by assets – and is 47.8% owned by the Moroccan royal family via the Société Nationale d’Investissement holding group. As well as consolidating its position in kingdom’s domestic market, the firm has also been expanding its activities across the continent, establishing operations in Tunisia, Senegal, Cameroon and Côte D’Ivoire.

The second-largest firm in the market is RMA Watanya, which is part of the FinanceCom group, the same holding that owns BMCE Bank. RMA Watanya had 16.2% of the Moroccan insurance market in 2018, including 18.7% of life insurance premiums and 14.2% of non-life premiums. In 2014 the insurer began to expand into other African markets, acquiring majority stakes in insurance operations in Togo, Cameroon and Côte D’Ivoire.

The third-largest insurer as of December 2017 was Saham Assurance, with 12.4% of total premiums. The firm was the market leader in the non-life segment where it accounted for 17.2% of all premiums, in addition to a 6.1% share of the life insurance market. In 2018 South African insurer Sanlam acquired a 53.37% stake of the company. Sanlam had previously acquired a 30% stake in the firm in 2016, increasing its participation to 46.6% in 2017.

Another foreign operator, Axa Maroc – owned by the French insurer AXA – had a 10.6% market share in the kingdom, according to ACAPS. Furthermore, according to local media the firm was reviewing its presence in several African markets, but planned to maintain its operations in significant markets including Morocco, Egypt and Nigeria.

German insurer Allianz is also present in the Moroccan market, after it paid €240m for a 98.9% stake in Zurich Insurance Maroc, the Moroccan unit of Switzerland’s insurance firm Zurich. The company officially began operating as Allianz Maroc in January 2017 and held a 3.2% market share as of December of the same year. Such investment by regional and international insurance market players should help to provide large amounts of capital for development of the industry and boost sector competition.

New Players

Furthermore, the market has also been spurred in recent years by the fast growth of Mutuelle Attamine Chaabi, established in 2016 as a joint venture between Banque Centrale Populaire and Mutuelle Centrale Marocaine d’Assurance. As of December 2017 the firm had a 9.5% share of total premiums, despite operating exclusively in the life insurance segment, where it has a 21.9% share. This makes the company the second-largest provider of life insurance products after Wafa Assurance.

Technological Drive

Competition within the country’s domestic market may well be further enriched through the use of digital distribution and marketing strategies by insurers. Mobile phone penetration in Morocco has expanded from 128% in September 2016 to 130.7% in September 2018, according to figures from the National Telecommunications Regulatory Agency. In addition, 93% of the kingdom’s 23.7m internet subscriptions were mobile internet subscriptions, as of September 2018. This also enables the more refined customisation of insurance offers across different segments of the market. Nevertheless, Moroccan insurers have so far focused primarily on using technology as a means to reduce their exposure to risk than as a means to market and customise their insurance products. “All insurance companies have digital strategies, but digital is only present in very specific areas,” Baddou told OBG. “Technology is still not used as a means to sell small insurance products in the manner you see in other markets. Nevertheless, this is something for the future and it will come,” he added.


As a result of the kingdom’s financial inclusion strategy the micro-insurance segment is likely to receive a boost. Part of the challenge associated with developing micro-insurance products has been the trade-off between producing insurance services that respond to the specific needs of lower-income Moroccans, while also ensuring adequate returns for issuers.

“We are preparing a study on what possibilities there are for increasing micro-insurance activity and how to better connect the insurance offering with customer needs,” Souafi told OBG. “One option might be to relax our current regulations in order to allow the entrance of new actors in the market.”


The Moroccan insurance sector continues to post significant growth figures, along with increased net profits and a rising share of GDP. This is testament to the relative maturity of the country’s market. Building upon the kingdom’s relatively developed banking sector, insurers have been able to raise the number of Moroccans accessing insurance products, especially in the life segment, which now accounts for almost half of the market.

Furthermore, the implementation of three new forms of compulsory insurance products, coupled with the finalisation of a regulatory framework to enable the sale of takaful is expected to further increase the number and type of premiums issued. However, despite high growth rates, the sector still has a considerable amount of room to expand. Many segments of the country’s population remain uninsured or underinsured, and the issuance of insurance premiums remains highly uneven across the country.

Continued expansion of the sector will therefore require further regulatory reform and attempts by ACAPS and industry players to establish a new roadmap to guide the continued development of the industry will no doubt prove invaluable in this endeavour. While the ongoing implementation of compulsory insurance appears set to positively impact premiums over the coming years, other avenues for the expansion of the market will likely gain prominence over the medium to long term.

Moving forwards, industry players are well positioned to make use of the high and growing usage of mobile phone internet subscriptions to develop and market new products. Furthermore, greater regional and international investment in the insurance market is set to boost competition in the sector, driving innovation and enabling insurers to access new markets within the kingdom as well as further afield.


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The Report: Morocco 2019

Insurance chapter from The Report: Morocco 2019

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This article is from the Insurance chapter of The Report: Morocco 2019. Explore other chapters from this report.

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