The insurance market has sustained its growth trajectory over the past five years and legislative amendments have contributed to enhancing its contribution to the national economy.
The insurance sector in Algeria has witnessed a great development in recent years, with GWP reaching DZD163bn ($1.2bn) in the past year compared with DZD137bn in 2020, around 5% average annual growth, thanks to legislative amendments that contributed to opening the market and enhancing its role in the national economy, said the Algerian Union of Insurance and Reinsurance Companies (UAR) president Youcef Benmicia.
In 2024, the insurance market in Algeria is expected to have achieved y-o-y growth of 4.2%. The growth is expected to continue in the coming years, Mr Benmicia told the First Radion Channel. He added that the insurance sector contributes significantly to stimulating economic development and attracting investments through savings invested in investment projects.
Mr Benmicia said that 2023 has witnessed a notable transformation in the structure of the insurance portfolio where the motor insurance branch was no longer in the lead but rather shared the leadership with the multi-risk insurance branch, which reflects a change in market needs and customer requirements.
The opening of the insurance market in 1995 has increased the level of competition between insurance companies in the market, which currently includes about 25 insurers, whether public, private, mixed or foreign, he said.
"Currently, around 2,000 authorised agents, more than 3,000 insurance agencies and 700 banking agencies are participating in the market, in addition to more than 60 insurance brokers. This diversity of companies and brokers contributes to creating a competitive insurance market with a wide variety of insurance products and services offered."
Upgrading the market level
The insurance sector’s contribution to the national economy does not exceed 0.5%, in the same rank with countries in the African continent such as Egypt and Nigeria, yet there is a need to improve this ratio to meet the needs of the local market, said Mr Benmecia. He added that the low penetration rate reflects the great untapped potential in the Algerian insurance market, especially in the field of personal insurance.
Public awareness campaigns should be intensified and citizens should be educated about the importance of insurance and its benefits to tap into the promising potential of insurance, he said.
"Innovative and simplified insurance offers must be presented in line with the transformations of Algerian society and its growing needs. And the legislative and legal framework for the insurance sector must be reviewed, especially with regard to market supervision and the application of prudential rules so that it will provide a stable legal environment that encourages attracting more local and international investments," he added.
On the other hand, he emphasised the importance of developing the reinsurance market, whether at the national or international level, to insure major industrial facilities that local insurers cannot cover alone, stressing the need to cooperate with international reinsurers, to enhance the financial capabilities of the local market and reduce dependence on foreign currencies.