While it has grown more than five-fold since the 1990s, Algeria’s insurance industry remains small relative to the size of the economy, with low penetration and density ratios – a common feature seen in emerging and frontier market insurance markets. The sector, which was partitioned into life and non-life segments in 2011, still sees more than half of its profits from automotive coverage, though the life segment has grown swiftly in recent years. Today, under pressure to stay profitable amid turbulent economic conditions, underwriters are expanding their product lines, points of sale and auxiliary services, especially assistance products. Amid slowing growth across the economy, insurers are also working to adapt quickly in order to remain profitable and maintain a strong safety net, which the current climate makes essential now more than ever.

Sector Actors

The Algerian insurance market counts 24 companies, of which 11 are majority state owned, 10 are private and three are mutual insurers. The largest of these today are state-owned general risk firms launched in the 1960s and 1970s with the mission of supporting particular economic sectors. In the liberalisation push of the early 1990s, however, all were relieved of their specialisations and freed to diversify their portfolios. In 1995 authorities also opened the market to private competitors, including international firms. Private insurers accounted for 22.8% of premiums collected in the first half of 2016, according the National Insurance Council (Conseil National des Assurances, CNA). A new regulation that went into effect in 2011 obliged insurers to specialise either in damage coverage or personal insurance, with the latter including life, travel, personal and group health, and credit insurance. Most established insurers responded by spinning off their existing personal coverage portfolios as subsidiary companies, giving the market its current configuration.

Life & Non-Life

The non-life segment today counts 13 firms, and continues to be dominated by public (SAA), Compagnie Algérienne des Assurances (CAAT) and Compagnie Algérienne d’Assurance et de Ré assurance (CAAR), all of which hold double-digit market shares. Behind them are private insurers such as Compagnie Internationale d’Assurances et de Réassurance and Alliance Assurances, and mutual insurers Caisse Nationale de Mutualité Agricole (CNMA) and Mutuelle Assurance Algérienne des Travailleurs de l’Education et de la Culture. The nascent life segment currently counts eight firms, including state-owned CAAR affiliate CAARAMA, CAAT’s Tala Assurances and SAA’s Amana. Private firms include MacirVie, BNP Paribas’ subsidiary Cardif El Djazair and Axa Assurances Vie, which is one of two local affiliates of France’s Axa. In 2015 the market saw its newest entrant in the privately owned Algerian Gulf Life Insurance Company, which has since been rebranded as L’Algérienne Vie.

Besides the firms in the life and non-life segments, three specialist players also occupy important niches. These are export credit insurer Compagnie Algérienne d’Assurance de Garantie des Exportations, mortgage insurer Société de Garantie de Crédit Immobilier and state-owned reinsurer Compagnie Centrale de Ré assurance (CCR). Since 2010, when new rules obliged insurers to reinsure at least 50% of their portfolios through CCR, the reinsurer has seen its domestic business grow considerably and remains active internationally.

The CNA serves as the insurance industry’s official concertation mechanism, regrouping insurers with intermediaries, customer representatives and regulators. Meanwhile, industry group the Algerian Union of Insurance and Reinsurance Companies (Union Algé rienne de Sociétés d’Assurance et de Réassurance, UAR) only includes insurance companies.

Key Indicators

Algeria’s insurance sector realised total revenues of AD130.8bn (€1.1bn) in 2015, a 2.2% increase over 2014, according to CNA statistics. Total year-on-year (y-o-y) revenue growth climbed to 3.2% in the first half of 2016. This contrasts with the regional trend across African markets, which have seen both life and non-life premiums decline since 2012, according to figures from Swiss Re. The small but dynamic life segment has expanded rapidly in the five years since its separation from the non-life segment. In 2015 life firms realised 23% growth to reach AD10.6bn (€87.7m) in premiums, representing 8.1% of the sector’s total, according to the CNA. The segment’s rise continued in the first half of 2016, collecting 9.1% of total premiums, driven by a particularly strong increase in group health coverage. As the life segment expands, it is challenged by rapidly rising claims costs, which reached AD2.3bn (€19m) in 2015. Though not even 4% of the industry’s total claims, that figure represents a 60% y-o-y rise.

The non-life segment, with AD118.1bn (€976.9m) in revenues, or nearly 91.8% of the total sector in 2015, saw growth flatten to 0.2% in 2015, down from 14.2% in 2014, according to the CNA. The non-life segment draws over half its revenues from automotive coverage, which has struggled to maintain growth over 2016 amid difficult conditions. The auto line contracted by nearly 2% y-o-y in the first half of 2016, but this slip was offset by strong rebounds in previously stalled transport (19%) and property (8.4%) insurance premiums. In aggregate, the non-life segment saw 2.5% y-o-y growth in premiums over the first six months of 2016. In the same period, claims fell by 3.7% y-o-y to reach AD28.3bn (€234.1m), of which 73% were auto claims.


Insurance penetration in Algeria has traditionally been quite low. According to Swiss Re, total premiums represented just 0.8% of GDP in 2015, as compared to 1.9% in Tunisia and 3.1% in Morocco. Density is also low, at roughly AD3300 (€27.30) per capita in 2015. However, these statistics fail to capture the country’s extensive social welfare system, which can make comparison with regional neighbours misleading. Nonetheless, Youcef Benmicia, CEO of CAAT, told OBG, “We can all agree that the ‘insurable potential’ is enormous, and certainly not reached, especially in certain segments and certain geographic areas.” According to CNA figures, over 40% of premiums in recent years have come from Algiers. However, insurers are investing in network development, more than doubling their points of sale between 2000 and 2014.

“In the last three years we have seen strong growth in our revenues, network and clients, but compared to the potential that exists it remains somewhat weak,” Chérif Benhabiles, CNMA director-general, told OBG. To expand its penetration, the agricultural mutual is experimenting with new distribution and service methods. In 2016 in the eastern region of Khenchela it inaugurated a “Farmer’s House” pilot, where farmers who are CNMA members can receive information on risk management and insurance products alongside free agricultural services like milk processing, veterinary exams and technical training. The centre represents a new approach for CNMA. “As a mutual insurer, this is not perhaps our usual role,” Benhabiles admitted, “but we have studied the needs of farmers in these rural areas and found that this is what they need, so we are doing what we can to support them.”


Other insurers are focusing on diversifying their products and distribution channels to reach more potential clients. With the authorisation of e-payment in October 2016 (see Banking overview), many insurers are upgrading their internet presence and preparing to launch online sales. Some have already developed online bill trackers and similar account services, and in October 2016 Amana became Algeria’s first insurer to offer online bill payment. Bancassurance sales via agreements between insurers and banks continued their considerable growth of recent years.


The insurance sector is overseen by the Ministry of Finance’s Insurance Supervision Commission (Commission de Supervision des Assurances, CSA), which is responsible for authorising insurers, intermediaries and reinsurers, as well as new insurance products. It also handles insurance regulation, receiving input on regulatory issues from sector actors via the CNA, which itself is informed by discussions within the UAR.

Among insurers’ priority recommendations in the past few years has been a revision to rules on intermediation to simplify the accreditation process for brokers and independent agents. In a June 2016 CNA newsletter Ahmed Chouchane, vice-president of the National Association of General Insurance Agents, said that the more than 1000 registered intermediaries brought in 32% of the sector’s total revenues in 2015, and insurers believe that licensing more of them could expand penetration. “If we really want to help develop the insurance sector and reach this mass of the population that is not insured, we need to improve proximity through greater intermediation. That means making it easier to enter this profession,” Benmicia told OBG.

Insurers and regulators are also collaborating to finalise regulations on takaful (Islamic insurance). Currently only one private insurer, Al Salama, offers takaful policies, though Benmicia told OBG that, in the absence of a regulatory framework that would allow for traditional takaful pooling, existing policies are merely takaful-like workarounds. Insurers believe adding such products to their portfolios may help them reach a sizeable segment of the population who currently avoids purchasing insurance. Benmicia added, “There is some demand, but we will not be able to gauge exactly how much until these products are on the market.”

In the agricultural sector, insurers are interested in developing regulation to better manage the impact of climate change. Algeria currently does not oblige or subsidise agricultural insurance for farmers, but as Benhabiles told OBG, “It is just a question of time until we put subsidies in place, because right now the state is fully shouldering the costs of climate change. They are the insurer of last resort who covers the cost of every catastrophe.” Drought pushed agricultural claims up 42% in 2015, according to the CNA. Some combination of coverage requirements or subsidies for crop insurance, Benhabiles said, would allow for climate-related production challenges to be managed within the framework of the insurance industry.

Life Segment

Given Algeria’s extensive social welfare system, uptake has been modest, but it has not dissuaded the eight firms active in this segment. Three consecutive years of double-digit growth show that the life segment is still far from reaching its full potential. In 2015 Aberhouche Nacer, director-general Taamine Life Aléire, said during a forum organised by the Chamber of Commerce and Industry of Djurdjura that he believed the life segment could grow to eventually become a $5bn market, some 50 times its current size. Life firms are also expanding their outreach to small and medium-sized enterprises (SMEs) interested in offering premium coverage as a means of attracting and retaining employee talent, offering new personal assistance packages (which accounted for 20% of the life segment’s revenues by mid-2016) and developing third-party pay policies in cooperation with health clinics, ambulance services and other health care providers. For high-end clients, MacirVie has also explored the possibility of coverage that would allow customers to receive premium health care abroad.

Non-Life Segment

Although the non-life segment has long been dominated by the auto line, other products are poised to play a greater role in driving the segment’s growth in the coming years. “Outside of automotive products, general risk lines are clearly under-exploited,” Nacer Sais, CEO of SAA, told OBG, pointing to the growth potential of obligatory products such as natural disaster and merchandise coverage, as well as fire and home insurance. While the automotive line contracted, other general risk products showed 8.4% y-o-y growth in mid-2016, according to CNA figures. Insurers expressed concern over the slowdown in infrastructure projects due to public budget cuts, but are compensating by expanding into underdeveloped product lines. According to Benmicia, less than 10% of Algeria’s real estate is insured beyond the basic natural disaster coverage, which has been mandatory since 2003, leaving room for expansion in property lines.

One of the fastest-growing services in the non-life segment is assistance. With repairmen in short supply across much of the country, several insurers have begun offering packages that provide home or auto assistance services, and others are scrambling to emulate them. “For the client, it is simple and it makes life much easier,” Benmicia told OBG. “This concept has existed for a long time, but we needed professionals in order to implement it, and now we have them.”

CAAT and other insurers now contract with local assistance companies, who maintain their own networks of service providers, or establish assistance-focused subsidiaries to support clients in need of home or auto repairs, towing and more. Auto assistance products were first authorised in 2007 and property assistance in 2013, and by 2015 this coverage had grown to account for AD3.6bn (€29.8) in revenues across the insurance sector. The almost 19% growth in auto assistance premiums in 2015 has helped to compensate for the fall-off in traditional auto coverage. Assistance policies also help to structure the market for repair services, generating efficiency that benefits clients, insurers and workers, Sais told OBG.

Auto Line

Though long the backbone of the non-life segment and Algeria’s insurance industry in general, auto coverage today faces major challenges that sector actors are working hard to fix. For years, insurers have relied on a steady stream of new business from vehicle imports, but authorities have slashed import quotas in a bid to reign in a severe trade deficit. Imports fell from 400,000 in 2014 to just 60,000 in 2015, according to the Association of Algerian Dealers and Automobile Manufacturers. A new Renault assembly plant near Oran is projected to produce 35,000 vehicles in 2016, compensating slightly for the lost imports. In January 2016 the Algeria Press Service reported that as the country has developed its internal highway network in recent years, accident rates have spiked, increasing by around 16% in 2015 and driving up claims. Though it accounted for just over half the sector’s revenues in the first half of 2016, the auto line received 73.2% of claims by value, according to the CNA. Sais told OBG that his company alone took over 400,000 claims in 2015, among roughly 1m filed across the sector. Costs per claim are also rising as the dinar’s depreciation increases prices for replacement parts, almost all of which are manufactured abroad.

To combat rising accident rates, the authorities are preparing a points-based driver’s licence system that will increase penalties for poor drivers. At the same time, the UAR is nearing completion of a national automotive registry that would allow insurers to track applicants’ driving history and prevent fraud and double coverage. Brahim Djamel Kassali, president of the UAR, told OBG that he expects the system to be rolled out in 2017, once the sector workforce is fully trained.

Claims Backlog

The UAR had hoped to launch the registry in 2016, but, according to Kassali, insurers were obliged to dedicate significant resources towards a more urgent priority for the sector: reducing a claims backlog. For years, red tape and slow processing has led to auto claims piling up, reaching nearly AD40bn (€330.9m) by mid-2015. Under pressure from the CSA, insurers worked to determine claim volumes and average values of the backlog year by year, then settled each year amongst themselves based on these averages and issued customer payments. “These late payments have had a negative impact on insurers’ public image,” Sais told OBG, “but it is a problem that the entire market, united under the UAR, is working to find immediate solutions.” In 2016 Kassali confirmed that this cost-averaging system allowed insurers to resolve all claims through 2012, and said the sector hoped to complete the process by mid-2017. “We need to sanctify the right to damage compensation,” Kassali said. To do so, in July 2016 UAR’s members agreed on a new streamlined claims system. Once fully in effect in 2017, it should allow clients to be paid immediately while insurers sort out responsibility and payments between themselves.

Price Competition

Price ceilings for mandatory insurance and reference prices for other policies are set by the Specialised Pricing Office, which is chaired by a representative of the Ministry of Finance and includes UAR representatives. But during years of easy growth, many insurers issued increasingly large discounts in order to attract clients, who now expect low-cost policies. “The curve will not stop trending downward,” Sais told OBG. “But ultimately this price dumping is not in the interest of either the insurers or the insured.”

Today, as premium growth has slowed in line with the economy at large, this phenomenon is squeezing sector profits. “We have always advocated that competition should focus on service quality rather than price,” Benmicia told OBG. “The degree of competition on prices is really inhibiting growth in the sector.”

Early in 2016, as insurers prepared to launch the national automotive registry, regulators urged all providers to reinstate bonus-malus pricing for auto insurance, adjusting premiums based on drivers’ performance rather than giving across-the-board discounts that cut profits while diminishing incentives for good driving. Some insurers within the UAR have been encouraging the association to resolve what they describe as excessively low prices, but Kassali said the moment is not right. He told OBG, “We need to take care of our own issues now, for example, by working hard to fix the auto claims backlog. Then in 2017 we will be in a better position to discuss increasing rates.”

Fund Placement

In addition to meeting minimum solvency requirements, insurers are required by law to hold at least 50% of reserve funds in Treasury bonds (T-bills). According to CNA figures, in 2014 insurers’ collective T-bill holdings totalled AD95.9bn (€793.3m), or 58.5% of reserves. They chose to exceed the minimum requirement because T-bills have typically offered interest rates between 3% and 4% in recent years. However, insurers’ calculation changed in May 2016 following the National Economic Growth Bond, which offered interest rates at 5-5.75%. In a June 2016 CNA newsletter Kassali said insurers had purchased AD15bn (€124.1m) in the bond in the first two months alone.


Improvements to automotive claims processing and determined efforts to resolve the claims backlog should help rehabilitate the insurance sector’s image somewhat in 2017, and relieve it of a long-standing financial burden. This will allow insurers to focus on expanding promising assistance and SME-tailored products, as well as products across the life segment. Regulators’ close attention to developing the sector and its contribution to the national economy should help insurers to resolve pricing worries and other regulatory obstacles. Many insurers are undaunted by the challenge. As Sais told OBG, “People often look for solutions in insurance when uncertainty rises, and so this period presents an opportunity for those with imagination, innovative products and good service.”