Tunisia's insurance sector-wide reforms aim to boost premiums and profitability


Despite relatively low penetration, Tunisia’s insurance sector has been growing steadily, with the rapid expansion of existing segments, such as life insurance, and the development of new ones, like takaful (Islamic insurance). The expected implementation of a revised insurance code, along with efforts to improve key growth and profitability areas, including client services and risk management, should help the sector reach its potential in the future.

Premiums & Growth 

Total insurance premium grew by 13.4%, from TD1.4bn (€537.6m) in the third quarter of 2016 to TD1.6bn (€614.4m) over the same period in 2017, according to the General Insurance Committee (Comité Général des Assurances, CGA). Over the 2011-16 period premium expanded by a compound annual growth rate of 16.4%.

Tunisia’s three listed insurance companies generated a combined TD572.2m (€219.7m) in premium for the year, up 7% on 2016. Société Tunisienne d’Assurances et de Réassurances (STAR), the market leader, accounted for about 60% of the total premium of listed insurers, with revenue growth of 2.5%, increasing from TD331.2m (€127.2m) in 2016 to TD339.1m (€130.2m) in 2017.

Penetration & Density 

Total premium as a percentage of GDP, or insurance penetration, reached 2.1% in 2016, up from 1.96% in the previous year, according to the latest figures available from the CGA. Tunisia maintained its second-place ranking in North Africa in 2016, behind Morocco with 3.5% and ahead of Algeria with 0.8%.

The industry’s density, or insurance premium per capita, rose to TD164.2 (€63.05) in 2016, following average annual growth of 8.4% over the 2012-16 period. Despite this positive trajectory, however, Tunisia’s insurance density is relatively low in comparison to the world average, which recorded per capita premium of €513 in 2016. It is also low relative to other emerging economies such as Turkey, which posted per capita premium of €132 in the same year, and Lebanon, at €216.

Claims & Profitability 

Total paid claims reached TD1bn (€384m) in 2016, an increase of 7.6%, though growth eased to -0.1% in the third quarter of 2017, from TD682.3m (€261.98m) to TD681.5m (€261.68m) year-on-year. That quarter saw paid claims in the automotive segment drop by 7.6%, from TD393.4m (€151.1m) to TD363.4m (€139.5m). Similarly, the transport segment saw a decline of 0.5% over the same period, from TD7.67m (€2.95m) to TD7.63m (€2.93m). However, this was largely offset by claims made in the life segment, which recorded a 10.3% increase, from TD82.9m (€31.8m) to TD91.4m (€35.1m).

In the face of rising costs, industry experts emphasised the need to improve risk management within companies. “A better risk selection is necessary if companies are to improve their profitability, which comes with trained actuaries integrated into a dedicated department within the company,” Hassène Feki, general manager of STAR, told OBG. However, rising costs were counterbalanced by a 10% increase in return on investment, reaching TD4.5bn (€1.7bn) in 2016. The sector’s overall technical result stood at TD122.1m (€46.9m), down from TD133.9m (€51.4m) in 2015, but higher than TD84.5m (€32.4m) in 2014.


Investments in bonds and Treasuries accounted for 50.5% of the funds invested by the industry in 2016, while 24.4% was invested in shares, 15.2% in money market and bank deposits, 5.6% in real estate and 4.3% in other assets. The trend is representative of insurers adapting to changing economic performance and risk assessments. “Companies have always preferred to invest more in fixed-income assets rather than the stock market, because they offer attractive interest rates and less volatility,” Rym Gargouri Ben Hamadou, director of the corporate finance department at brokerage Tunisie Valeurs, told OBG. Invested funds contributed to an improvement in the risk coverage rate in 2016, which reached 117.3%, up from 115.3% in 2015 and 109.1% in 2014.

Market Players & Fragmentation 

The Tunisian insurance market is composed of 22 onshore companies, including five operating in the life segment – of which four are sister companies or subsidiaries of non-life firms – three takaful providers, one export credit insurer and one reinsurer.

Industry experts have described the market as overcrowded. “For such a small market, 22 insurance companies is too much,” Mohamed Dkhili, CEO of GAT Assurances, told OBG. “It builds unhealthy competition for lower prices, compromising the quality of services.” Despite the sector’s fragmentation, consolidation is not on the insurers’ short-term agenda, according to Mustapha Kotrane, head of production at Tunis Re. “Strategic partners expect to obtain control of the company they invest in, which current shareholders are reluctant to offer,” he told OBG.

For the fifth year in a row, the sector was dominated by STAR Assurances in 2016, whose premiums accounted for 17.9% of the total, a decrease from 18.2% in the previous year. French insurer Groupama holds a 35% stake in the company, leaving the state with the majority share. The second-highest premium was again recorded by Compagnie Mé diterranéenne d’Assurances et de Réassurances (COMAR), which belongs to the Tunisian family-owned conglomerate Amen Group, with a 9.2% share of total premium. AMI Assurances maintained the third position, with a market share of 8.4%, after pushing GAT Assurances into fourth place in 2015.

While AMI Assurances had been looking for a strategic partner since 2015, the firm declared the bidding process unsuccessful in December 2016 and its ownership remains unchanged; state-owned Banque Nationale Agricole and local family-owned HBG Holding each own around 25% of the firm’s capital.

Regulatory Framework 

The current insurance code was instituted in 1992, although it has been updated several times since – in 2002 and 2005, to include a Motor Vehicle Insurance Act; in 2008, with the creation of the CGA; and again in 2015, to set up a legal framework for takaful.

A new insurance code, however, has been under review since January 2017 and aims to bring major changes to the industry. In a meeting with OBG, the CGA detailed the draft code, which should be submitted to the government by the end of 2018. “The new code will impose stricter rules in terms of governance, including the creation of risk-management entities within companies,” Hafedh Gharbi, president of the CGA, told OBG .

The new code will also establish a legal framework for life insurance, and separate life and nonlife activities. Furthermore, measures to ensure consumer protection will be encapsulated in the new legislation through the industry’s representative body, Fédération Tunisienne des Sociétés d’Assurances, which will serve as a mediator in instances of disputed claims.


Tunisia’s insurance sector continues to be dominated by the automotive segment – which accounted for 44.9% of premium in the third quarter of 2017 – partly because, as in many other markets, third-party civil liability vehicle insurance is mandatory. Transport made up 3.1% of the total, an increase from 2.9% in the third quarter of 2016. Other non-life business lines of insurance had a combined share of 32.4%, decreasing slightly from 33% over the same period.

In 2016 group health insurance accounted for 14.3% of total written premium and recorded growth of 11.4%, which made it the fastest-growing non-life product that year. However, despite these gains, the group health insurance segment made a loss of TD10.4m (€4m) in 2016, in large part due to fraud, according to industry players, although the situation is said to be improving. “GAT Assurances has focused on reducing fraud in the health segment in 2015 and 2016, which has enabled the company to launch a third-party system in 2017 without increasing risks of fraud,” Abdessatar Ben Hamza, individual risk director at GAT Assurances, told OBG.


The fastest-expanding line, life insurance, registered TD309.2m (€118.7m) of premium in the third quarter of 2017, up 29.2% year-on-year, and increased its market share from 17.2% of total premium to 19.6%. Despite this, life insurance penetration remains restricted by cultural perceptions.

“Life insurance should play a bigger role in funding the national economy, so there is a need to encourage insurance-based savings,” Mondher Khabcheche, deputy director-general at insurance company Assurances At-Takafulia, told OBG. “Yet this line of business suffers from a negative image in Tunisians’ eyes, which calls for regulatory reforms to improve the commercialisation of life products.”


Insurance companies ceded TD353.7m (€135.8m) to reinsurance in 2016, equivalent to a cession rate of 19.1% of total premiums. In the third quarter of 2017 Tunis Re, the sole domestic reinsurer, took in premiums of TD87.7m (€33.7m), an increase of 3.8% on the same period in 2016. “In Tunisia, insurance companies are not legally obliged to cede a certain percentage of their premiums to the national reinsurer, which helps to create and develop a competitive reinsurance market,” Elyes Darghouth, general manager of the French insurance broker Gras Savoye, told OBG.

Tunis Re is therefore working to develop its footprint abroad as well as domestically. “The Tunisian market remains the most important one in Tunis Re’s turnover, but its share has been decreasing as some other African and Arab markets have experienced faster growth in recent years,” said Kotrane. This trend was confirmed in 2017, with premium growth of 12.4% in foreign markets, as opposed to a 5% contraction in local premium, boosting overall annual turnover by 2.5% to TD116.3m (€44.7m). According to the reinsurer, this was due to intense competition within the local market amid stagnating economic activity that brought down prices and premiums.

Bancassurance & Micro-insurance 

Both bancassurance and micro-insurance have high potential to boost sector penetration. “The example of Attijari Assurance, a subsidiary of Morocco’s financial group Attijariwafa Bank, which became the market leader in life insurance only three years after it entered the Tunisian market largely thanks to its bancassurance strategy, has proven that a lot can be done through tight collaboration between insurance companies and their bank partners,” Gharbi said. However, bancassurance represented only 9.5% of total insurance sales in 2016, which made it the fourth distribution channel after direct and indirect agents, at 32.2% and 40.3%, respectively, and insurance brokers, at 16%.

For its part, micro-insurance is still in its infancy, with an initial agreement signed between Carte Assurances and micro-lender Microcred in May 2015. However, the segment is set to receive a boost under a new regulatory framework (see analysis).


Although in its early stages, takaful has been growing rapidly since the country’s first sharia-compliant firm, Zitouna Takaful, launched activities in 2013. In 2016 total takaful premium stood at TD70.6m (€27.1m), which represented a 43.2% increase on 2015. Tunis Re’s retakaful premiums also experience significant growth that year, hitting TD9m (€3.5m), a rise of 36.4% compared to 2015.

Zitouna Takaful maintains the largest takaful market share, at 50.6%, followed by El Amana Takaful, with 31.4%, and the newest market entrant, Assurances At-Takafulia, which began operations in 2014 and claimed market share of 18% in 2016. “Assurances At-Takafulia should achieve TD16.5m (€6.3m) in premium in 2017, a 30% increase on 2016, which emphasises the potential of this segment despite its relatively small size,” Khabcheche told OBG. “Furthermore, better-informed risk selection and portfolio monitoring lowered the company’s claims rate for the motor segment to 60% in 2017, compared to 114% in 2014, 80% in 2015 and 66% in 2016.”


Tunisia’s insurance sector shows significant potential for growth. Key segments include life insurance, which, while the fastest-growing policy line, could assume a more prominent role in supporting the economy, and innovative products, such as takaful and micro-insurance. Among the factors that should contribute to growth in the future are the CGA’s ongoing reforms to the regulatory framework, which aim to support the development of new insurance segments and improve customer care. Efforts to raise profitability by investing in risk-management tools are expected to contribute to better pricing and service quality, both seen as essential for boosting the sector’s appeal and penetration.

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The Report: Tunisia 2018

Insurance chapter from The Report: Tunisia 2018

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