Insurance sector in Tunisia to see new regulations as premiums rise

Although insurance penetration levels in Tunisia are low by international standards, overall premiums are growing steadily and the life segment is expanding rapidly, as are new niches such as takaful (Islamic insurance) and micro-insurance. The industry regulator is also working on a number of reforms to bolster sector development, including changes in the rules on pricing mandatory third-party liability car insurance, which is among the largest product lines sold in the country but is currently loss-making.

Overall Premiums & Growth

Tunisian insurance 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 d’ Assurances (FTUSA), up from TD1.41bn (€646.6m) the previous year, an increase of 10.2%. This was broadly in line with growth 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 market as a whole in 2015 were not available at the time of writing; however, the country’s largest insurer 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 year, 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 similar rate to the recent past in coming years, though she added that in the short term growth rates could fall to around 5% due to what she described as a slowdown in investment and the wider economy.

Global Position & Penetration

Swiss Re Sigma’s “World Insurance in 2014” report ranked Tunisia as the ninth-largest insurance market in Africa (out of 10 for which data is given), based on total premiums of $888m, and the 80th-biggest in the world. The firm put penetration – measured as a ratio of premiums to GDP – at 1.8%, roughly in line with the MENA average of around 1.6% and the second-highest ratio for North African countries, behind Morocco at 3.2% and ahead of Algeria and Egypt at 0.7% each.

Penetration levels were also the sixth-highest of the African countries for which data is provided by the Sigma report and the 65th-highest level worldwide. Per capita 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 world.

Market Players

There are 23 onshore insurance companies in Tunisia, including four mutual companies. Of the total, 13 are conventional generalist 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 bank), one is an export credit insurer, one a reinsurer and three are takaful providers. Six offshore insurance firms also operate out of the country.

Industry 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 too many insurance firms for the size of the country. “Around a dozen firms have captured most market share, while the remainder are small and struggling to grow,” he said. Despite this, industry consolidation does not appear to be on the cards. “Many insurance firms belong to banks or family-owned conglomerates, which means they are unlikely to merge with other insurers,” Jebira said.

STAR Assurances is the largest firm by premiums, with an onshore market share (excluding business written by Tunis Re) of 18.5% in 2014 (the latest year for which full market data is available) according to FTUSA figures. French insurance group Groupama owns a 35% stake in the firm, the Tunisian state a 38.6% share and state oil company Entreprise Tunisienne d’Activités Pétrolières a 19.02% stake. The firm collected premiums worth TD309.5m (€141.9m) in 2015, up 7% on TD289.3m (€132.7m) the previous year. Some 98% of this turnover came from non-life lines. In May 2015 the firm launched a five-year strategy focused on growing its life, agricultural and small and medium-sized enterprise lines.

In second place is Compagnie Méditerranéenne d’Assurances et de Réassurances (COMAR), with a 10.1% market share in 2014. The firm is part of the Amen Group, which is controlled by Tunisia’s Ben Yedder family through holding company PGI, as is sister life insurance firm Hayett Insurance, which had a market share of 2% in 2014. The third-largest firm is GAT, with an 8.5% market share. The firm – whose life insurance subsidiary, GAT Vie (formerly 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 insurance premiums stood at TD706.9m (€324.2m) in 2014, equivalent to 45.4% of total premiums, making this segment by far the largest insurance line in the country. This was thanks in large part to third-party liability car insurance’s status as the only major mandatory insurance line. Premiums were up 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 whole. STAR was the largest player in the segment, with a market share of 21.8% according to FTUSA figures, six percentage points ahead of its nearest rival. The three largest firms in the segment accounted for just under half of premiums (49.2%).

Premiums in the segment, which are heavily regulated, appear set to rise in coming years, following a decision by sector regulator the General Committee on Insurance (Comité Général des Assurances, CGA) in April 2015 to raise the premiums for compulsory liability insurance by 10%. Later that year the CGA announced it would continue with similar raises over the coming five years (see analysis).

Other Non-Life Lines

After car insurance premiums, the next largest non-life insurance segment is group health insurance, which accounted for 14% of total insurance premiums in 2014 and grew at a CAGR of just over 8% between 2009 and 2014. However, Gargouri said that despite respectable growth rates, the segment was currently still loss-making. “Group medical insurance brings in a lot of premiums but also has a high claims rate and is struggling to reach profitability,” she told OBG, adding that companies were currently reviewing their prices in an effort to improve the situation.

STAR again is the largest player in the group medical insurance segment, with a 2014 market share of 34.2%, while the top three firms (STAR together with Maghrebia and GAT) accounted for 59.8% of medical premiums. In third place is the miscellaneous risks segment, with a 2014 market share of 9.4%, while fire insurance accounted for 6.9% of premiums and transport insurance for 4.7%.

Life Insurance

Although life insurance turnover 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 period), compared to 7.5% for the non-life segment. Life premiums grew by an even stronger 22.1% in 2014, the latest year for which data is available. “Life insurance offers huge potential for growth but the products need to be simplified and the benefits highlighted to make it more attractive for potential customers,” Mohamed Dkhili, CEO of GAT Assurances, told OBG.

Much of the business in the segment comes from life policies taken out to cover bank loans, and its recent growth is likely to have been driven to a substantial extent by retail lending, which also 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 coming years – capitalisation products, she said, are likely to expand particularly rapidly. Government proposals to reform the country’s state pensions system could likewise present significant opportunities for growth in the savings segment in the future.

However, industry figures say that the prospects for some other life products are less good. “Life insurance isn’t working well outside of bancassurance products,” Jebira told OBG. “It is partly a cultural issue and because insurance firms aren’t investing enough in marketing 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 problem, but there remains a need for firms to invest more in marketing their products,” he continued.

There are five dedicated life insurers currently operating in the country, namely Attijari Assurances, Carte Vie, GAT Vie, Hayett and Maghrebia Vie, which when taken together held a 54.1% share of the life insurance market in 2014 (unlike in some markets such as neighbouring Algeria, generalist firms are also allowed to sell life insurance).

Attijari was the largest of the five in 2014, on premiums of TD40.4m (€18.5m), equivalent to 2.6% of total insurance premiums and 15% of total life insurance premiums for the year, despite only having begun operating in late 2012. The firm is a subsidiary of local bank Attijari, which in turn is part of Moroccan financial group Attijariwafa Bank.

The other four dedicated life insurance companies are all subsidiaries or sister companies of the non-life insurance firms. The largest of them, Maghrebia Vie (just behind Attijari on 2014 premiums of TD39.4m, or €18.1m), is part of local conglomerate the UFI Group, which also owns general insurer Maghrebia, the fifth-largest insurer in the country with a 2014 market share of 7.7%. Astree had the largest life business among the generalist firms (coming in fifth place overall in the life segment), with a market share of 8.7% in this product line.


The cession rate – the proportion of premiums taken in by Tunisian insurance companies transferred to reinsurers – stood at 22.48% ( equivalent to TD346.2m, €158.8m) in 2014, down slightly 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 insurance companies made a loss on reinsured 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 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 state also has a 5.2% stake in the company. In June 2015 the firm increased its capital from TD75m (€34.4m) to TD100m (€45.9m) through a share offering to existing shareholders. Tunis Re’s level of premiums reached 3% in 2015.

Since 2009 the firm has posted premiums growth at a CAGR of just under 10%. The firm is active in both Tunisia and abroad, primarily in other North African markets and in West Africa; some 37% of its premiums were issued overseas. Fire insurance made up the largest share of its turnover by branch, at 33% of the total. Conventional insurance 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 outlook for the market in 2016 was healthy. “Demand should grow as several major projects such as the Tunis Sports City real estate development may restart,” he told OBG (see Real Estate chapter). “And while the tourism market is unlikely to fully recover, the situation will probably improve compared to 2015.” He added that the prospects for foreign investment were also good, but that competition in the local reinsurance market as strong and growing. “There is competition from both mega-reinsurers in Europe as 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, down from TD849.2m (€389.4m) the previous year. Car insurance claims accounted for the majority (54.6%) of the total. Industry profits (before taxes), meanwhile, stood at TD106.8m (€49m) in 2014, up 29.5% on 2013. The sector made an underwriting loss (premiums minus claims and outlays such as management costs) of TD26.3m (€12.1m), but reached profitability thanks to returns on its investments. “Underwriting profits are low 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 underwriting returns,” Gargouri said.

Profits in the non-life segment fell following the 2011 revolution, 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 loss of TD14.6m, €6.7m, in 2011) and the fire and miscellaneous risks segment (in which technical profits fell from TD41.1m, €18.8m, to TD21.5m, €9.9m), as 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 car segment returned to profitability (of TD15.9m, €7.3m) and fire and miscellaneous risk returns rose on their pre-revolution figure (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 insurance agents operating in the country as 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 industry figures say the channel is not working as 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 place, banks are often reluctant to sell life insurance policies on commission for fear of competing with their own savings products – a trend that may help to explain Attijari’s rapid emergence as the country’s largest dedicated life insurer, given its ownership by a bank.

Meanwhile, selling insurance via the internet has so far not taken off. “Companies have not really addressed the internet as a distribution tool at all yet,” Jebira said, adding that there was also a lack of price comparison websites. “There are only two notable sites, and the larger of the two only deals with a few companies and cannot really be classed as a full comparison site,” he told OBG.

Islamic Insurance

There are three takaful insurance operators in the country, namely Zitouna Takaful, El Amana Takaful and At-Takafulia. The sector is small but growing rapidly: the three firms sold combined premiums of TD29.1m (€13.3m) in 2014 ( equivalent to 1.9% of total premiums volume), up from TD8.93m (€4.1m) the previous year, and El Amana and Zitouna were in the top three fastest-growing insurance firms for the year (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 regulatory framework for the segment, which should help its expansion. Only dedicated takaful firms are allowed to offer the product, with conventional insurers forbidden from opening Islamic windows.

As a result, some insurers have taken stakes in separate 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 premium 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 part of the Zitouna Holding firm. The group, which was formerly known as Princesse Holding and was established by Mohamed Sakher El Materi, the son-in-law of former president 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 second 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 venture between several Tunisian conventional insurers (namely COMAR, Carte, Astree and Tunis Re) and the Saudi Arabian group Dellah El Baraka, which also owns Tunisian Islamic bank El Baraka and leasing firm Best Lease. The smallest of the three – which is also the youngest, having begun operating in early 2014 – is Assurances At-Takafulia, which is itself a joint venture between several Tunisian financial institutions (insurers Salim, Star, CTAMA, AMI, MAE and Tunis Re, and local bank Stusid Banque) and a foreign partner, namely the Jordanian Islamic Insurance Company. The 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 promising, not only because of the appeal of sharia-compliant products to some customers but because the young firms in the segment have started work with a mindset different from that in much of the industry. “Until recently insurance 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 market share as a result, in particular as regards life insurance,” he said, adding that prices from both takaful and insurance firms are similar.

Gargouri said that while she thought that the sector would likely continue to grow, it would take time for it to reach its potential full potential .

“There was a lot of buzz surrounding takaful when it was first launched and it has grown quickly, and there is also demand for sharia-compliant insurance products. However, the segment is reliant in part on the development of the Islamic banking sector, which is experiencing some difficulties such as finding Islamic refinancing,” she told OBG.


The year 2015 saw launch of Tunisia’s first micro-insurance initiative, in the form a micro-bancassurance project between the lender MicroCred and local insurance company Carte. In the first instance the firm is focusing in particular upon providing life insurance to cover borrowers from the microcredit firm. “The initiative has given Tunisian micro-entrepreneurs the opportunity to buy insurance for the first time in their lives, at low premium costs they can afford,” Hassan Zergouni, chairman of the board at MicroCred, told OBG.

While the segment has only just launched and is in its infancy, Jebira said that the insurance sector is working to put in place a regulatory framework to encourage its development.


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

Bonds accounted for 52.7% of local companies’ investment portfolio in 2013, according to latest available figures from the CGA, followed by shares (22.4%), money market and bank deposits (14.4%), real estate investments (6.3%) and other assets (4.2%). The sector is also an important player in local financial markets. Insurance companies are the second-largest purchasers (after banks) of local corporate bonds, accounting 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 shallow and bond transaction levels are very low, making trading difficult (partly because insurance companies themselves prefer to buy and hold bonds), Gargouri said that local bond issues nonetheless 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 regulatory framework should be modified to encourage this. “Larger investments by insurance firms in stocks would help to develop the equity market as well as giving them better long-term returns than bonds do,” she told OBG. In this light, she described companies as excessively conservative, arguing that they need not be fearful of equity markets’ higher levels of volatility given the long-term nature of their investments.


While the life market has been growing quickly in recent years, low 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 market expands, reforms of mandatory auto liability pricing (see analysis) should also help to boost profitability in the dominant but loss-making segment, allowing firms to invest in less developed areas of the industry.

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The Report: Tunisia 2016

Insurance chapter from The Report: Tunisia 2016

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