The CGA report shows that during 2021, the insurance penetration rate in Tunisian economic activity was around 2.5%. A rate that remains low compared to what is recorded in emerging countries, but also to the world average, which fell from 7.4% in 2020 to 7% in 2021.
Due to the global health crisis caused by the “Covid-19” virus and after the difficult political, economic and social situation that our country has been through for several years, “the insurance sector in Tunisia has not been sheltered. Nevertheless, it succeeded at the end of this year to overcome all these difficulties with the least possible damage thanks to the financial solidity of the companies that were able to recover gradually, registering a recovery compared to the previous year with a positive average growth. comparable to those achieved in the last years prior to the epidemic. This improvement certainly remains dependent on the development of the pandemic and the economic and financial context on both a national and global scale”, specified Hafedh Gharbi, Chairman of the General Insurance Committee at the start of the committee’s report for the 2021 exercise. He continued: “It is certain that the Tunisian insurance market has enormous potential for a t achieve increased growth and a greater qualitative leap in the coming years”.
2.5%, the insurance penetration rate in the Tunisian economy
Despite the importance and essential role played by the insurance sector in the financing of the national economy thanks to its contribution to supporting savings and stimulating investment, the annual report of the General Insurance Committee (CGA), regarding the fiscal year 2021, shows that Tunisia’s share of the world market for insurance remains relatively low compared to other emerging countries in the region in the States of Europe, the Middle East and Emerging Africa (Emea), as it has not exceeded 0.014%, while it is around (0.08%) in Morocco, (0.04 %) in Egypt, (0.18%) in the United Arab Emirates, (0.15%) in Turkey and (0.16%) in Saudi Arabia.
According to the same report, this proportion is also still very low compared to developed countries, i.e. (39.6%) in the USA, (5.9%) in Japan, (5.8%) in the UK and (4.3%) in France.
The CGA report also shows that the insurance penetration rate in Tunisian economic activity in 2021 was around 2.5%, which is still below the levels recorded in emerging countries such as Morocco 4%, the United Arab Emirates 2.9%, and quite far from South Africa 12 .2%, the US 11.7%, the UK 11.1% and France 9.5%, as well as the world average falling from 7.4% in 2020 to 7% in 2021.
In terms of insurance density in Tunisia, it has continued to grow in recent years, going from 206.2 dinars in 2019 to 217.8 dinars in 2020 and then to 235.8 dinars in 2021, an increase of approx. 8.3% compared to 2020. , this level is still very low compared to the world average, which is around 2,447 dinars in 2021 (equivalent to 874 USD).
The share of life insurance accounts for 25.5%, or about 60 dinars, against a world average of about 1,096 dinars, while non-life insurance represents 74.5%, or the equivalent of 175.8 dinars, against a world average of about 1,378 dinars.
Compared to developed countries, the share of life insurance in Tunisia is very low compared to developed countries, as the average premium per per capita is USD 8,193 in the US, USD 6,610 in Switzerland, USD 5,273 in the UK, USD 4,140 in France and USD 3,202 in Japan… Life insurance is also weak, although compared to other emerging economies such as the United Arab Emirates ($1,305), South Africa ($852), Saudi Arabia ($312), Kuwait ($352), Morocco ($143)…
The structure of the market
By the end of 2021, the Tunisian insurance market had 24 resident companies, taking into account the two new companies approved in 2020 and specializing in life insurance and capitalization. It should be noted that one insurance was able to start its activity, and the other, whose activity has not yet started during the year 2021, but which has obtained agreement from the CGA and the Ministry of Finance to extend the statutory deadline for implementation of activities on 4e quarter 2022. The majority of resident companies (i.e. 22 companies) operate under the status of a limited company, and two are incorporated as mutual companies. In addition, fifteen of them operate in multi-branches, three of which specialize in Takaful insurance. As for the other companies, they specialize in a certain insurance activity. There are thus seven companies specializing in life and endowment insurance, one company specializing in export credit insurance (Cotunace) and one company specializing in reinsurance (Tunis-Ré).
There are eight non-resident or offshore companies, including five branches and three representative offices of non-resident insurance and reinsurance companies. As for insurance intermediaries, the market is also packed with a dense network of insurance intermediaries (1,270 in 2021). , almost all of which operate as corporate agents (1,099), along with 63 brokerage offices as well as 108 life insurance producers. This network, which covers most regions of the republic, thus offers local services to policyholders.
According to the CGA report, another link, no less important in this chain of insurance services, is that of experts. Almost 1,027 experts and 100 claims commissioners, with various qualifications ranging from auto mechanics to electronics and aviation, are registered in the registry maintained by the Tunisian Association of Insurance Companies (Ftusa) for the purpose of assessing catastrophic claims. As for actuaries, their number in the Tunisian insurance market is still limited to only 29.
Total premiums written in 2021 registered a significant growth of 10.2% against 6.5% the previous year and an average rate recorded over the last five years (2017-2021) which is around 8.8% and exceeded 2,833 MD (vs 2,571 MD in 2020).
The turnover of the Tunisian reinsurer achieved a return to growth of 3.1% compared to a decrease of around 2.3% over the past year (after its significant positive growth of 14.2% at the end of 2019), and thus exceeded 163 MD against 158 MD and 162 MD in 2020 and 2019, respectively. This relative improvement is mainly explained by the company’s success in overcoming the consequences of the health pandemic “Covid-19”, which significantly affected the level of accepted premiums, which recorded a significant decrease, especially under optional agreements, for each of the two lines of transport insurance and engineering and construction insurance. As for non-life insurance premiums, they increased by 8.4% against 5% in 2020 (6.3% in 2019, 6% in 2018 and 11.1% in 2017), with an important difference between the different branches of this category. At the same time, the share of non-life insurance remained high at around 74.5% compared to 75.7% in 2020 and a global average of 56.3% in 2021.
In terms of compensation, the year 2021 saw a remarkable increase of 21.3% compared to its unusual decrease of 5.1% at the end of last year (and its growth of more than 12% in 2019), bringing the total to 1,636 MD against 1,348 MD in 2020 (approx. 1,421 MD in 2019). Total claims have increased over the past five years (2017-2021) at an average annual rate of around 10%, which exceeds the average growth rate in premiums written, which was 8.8% over the same period.
The development of the global insurance market
After the year 2020 marked by the effects of the health crisis, the solvency of insurance companies in the world market has proven to be solid and they have been able to bounce back and return to growth in all their activities.
In a context of general economic recovery with global GDP increasing by 6.1% after a 3.1% recession in 2020 and the end of interest rate cuts, the year 2021 will have been synonymous with resilience for insurers and activity in the sector is turning back to trends before the health crisis. In 2021, thanks to favorable economic factors, increased risk awareness and record savings driven by booming markets, total premium volume increased by 3.4% at constant prices (compared to -1.3% in 2020) to reach USD 6.861 billion compared to USD 6.292 billion USD in 2020.
The non-life insurance sector grew by 2.6%, driven by the tightening of commercial rates in advanced markets. However, in China, the largest growth market, claims premium volume fell by 0.7% as the liberalization of motor insurance triggered fierce competition.
After falling more than 4% in 2020, life insurance premiums increased strongly (+4.5%) in both advanced markets (+5.4%) and emerging markets (+6.7%, excluding China). Life insurance premiums in China fell 2.6% due to weak life savings activity caused by a further decline in critical illness business.