The Competition Council (CC) has pointed out major structural challenges facing the insurance market, among several other key sectors of the economy, stressing the urgent need to promote genuine competition in the market.
In its 2023 Annual Report, released earlier this month, the CC calls for a thorough review of market practices to strengthen the resilience of the Moroccan economy and improve conditions for consumers.
The CC says that the insurance sector is marked by high concentration, dominated by a small number of long-established players. High capital requirements hinder the entry of new competitors, thus limiting innovation and the diversity of products offered. This concentration creates a disadvantageous situation for consumers, who have limited choices.
The Council conducted a competitive analysis of the insurance market, the legal and regulatory framework governing it, its operations, the players and stakeholders operating there, the products marketed and the prices charged as well as the distribution channels.
To this end, the Council analysed the market to assess the conditions of access and the level of compliance with the principles of fair competition, by also examining demand, supply, and market concentration.
It notes that the insurance regulator, the Insurance and Social Security Supervisory Authority (ACAPS), has imposed regulations that limit competition, especially for new entrants who cannot offer composite insurance services, unlike older operators who can, and for small companies that struggle to meet high capital requirements and several other barriers.
In addition, the market remains concentrated at the overall level and in certain insurance products, which requires improving innovation and increasing supply that does not always meet the diverse needs of consumers. Also, regulatory issues and potential conflicts of interest hamper effective competition.
The CC focusses on the challenges of competition in the insurance sector and the main competition rules for the benefit of consumers. In this respect, the Council has stressed the need to strengthen competition as a means of developing the insurance offer, both in terms of quality and prices, given the expectations of policyholders and the economic, social, and technological changes that the sector is experiencing.
The Council says that achieving these objectives requires:
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the revision of the legislative and regulatory framework to relax the conditions of access to the insurance market,
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the implementation of measures to improve the insurance offer,
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the development of competition in certain market segments,
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the expansion of distribution channels,
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the strengthening of digitalisation,
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the protection of consumers and
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improvement of the quality of insurance services.