Algeria: Conventional insurers could open takaful windows to tap growth
Source: Middle East Insurance Review | Nov 2024
Takaful is experiencing fast growth in Algeria through an enabling legislative and regulatory framework. As the sector grows, it is likely that new players will enter the market, driving competition and innovation.
Conventional insurance companies could also be tempted to open takaful windows to capitalise on this trend. In its 1Q 2024 report on the sector, the National Insurance Council indicated that takaful contributions surged by 265% year on year to DZD104.3m ($782,000). Of this total, general takaful accounted for DZD64.4m while family takaful accounted for DZD38.9m.
Takaful was introduced officially by the 2020 Finance Law and the subsequent release in February 2021of the regulatory framework.
Two takaful companies were established in 2022. They are El Djazair Takaful, engaged in property and casualty insurance and El Djazair El Moutahida Family Takaful, focused on family insurance. These companies were formed by public banks and insurance companies.
Despite the significant growth, challenges persist in the takaful sector. The current regulatory framework does not yet cover accounting, taxation, investments and prudential rules.
The opening last year of the first commercial Islamic insurance agency, Algerian General Takaful in Algiers, marks a new step in the accessibility of shariah-compliant products to the general public. M