Casablanca – The Moroccan insurance sector has continued its growth trajectory in 2024, despite navigating a range of challenges. The sector achieved a solid 5.1% increase in turnover during the first half of the year, bringing its direct business volume to approximately $3.3 billion. This growth was driven by both life insurance, which saw a recovery, and a continued strong performance in the non-life insurance segment.

Life insurance shows positive momentum

Life insurance has rebounded in the first half of 2024, recording a 5.1% growth in premiums, totaling $1.4 billion. While this represents a positive recovery, it still falls short of the sector’s historical growth rate, which has averaged a compound annual growth rate (CAGR) of 11.9% over the past decade.

The growth was mainly driven by strong performance in savings policies in Moroccan dirhams, which increased by 5.7%, accounting for 83% of life insurance premiums. However, other areas, such as death insurance and unit-linked savings, experienced more modest growth, rising by 2.8% and 1.4%, respectively.

Non-life insurance continues steady growth

The non-life insurance sector maintained a strong performance, with premiums totaling $1.9 billion, reflecting a 5.0% increase. This growth aligns with the sector’s average growth over the last decade. The automobile insurance segment was a standout, contributing significantly to the overall increase, with premiums growing by 5.6% to $900 million. Meanwhile, personal accident insurance also saw a healthy increase of 5.5%, reaching $300 million.

Additionally, fire insurance premiums surged by 7.4%, totaling $185 million, further adding to the positive performance. Other non-life segments, which make up roughly 27% of the market, grew by 2.7%, with premiums totaling $505 million.

Reinsurance market remains stable

In the reinsurance segment, premiums accepted by reinsurers increased by 4.9%, reaching $300 million. The national reinsurer, which holds 83% of the market share, remains a key player in the market, especially in non-life reinsurance, which makes up 96.1% of its total accepted premiums.

Profitability shows improvement, but non-insurance investments weigh down results

By the end of June 2024, the sector’s profitability showed an overall improvement, with a 3.0% rise in net income, reaching $320 million. However, this positive performance masks a divergence in results across different segments.

The technical result—representing the core profitability of the insurance business—grew by a robust 20.4%, totaling $412 million. This was largely driven by a rebound in the financial balance, which increased by 27.5%.

On the other hand, the non-technical result, which encompasses investments outside the core insurance activities, turned negative, posting a deficit of $3.3 million. This marked a sharp contrast to the $42 million surplus reported in the previous year and partly offset the overall growth in net income.

Direct insurers show stronger performance than reinsurers

Direct insurers saw an 8.0% improvement in net results, which totaled $310 million, highlighting their continued resilience. In contrast, the national reinsurer faced significant challenges, with its net result plummeting by 59.7% to just $9.2 million, signaling vulnerability in the reinsurance market.

Financial strength shows slight erosion

Despite the positive growth in premiums and profitability, the sector’s financial base showed slight signs of erosion. At the end of June 2024, the sector’s equity decreased by 0.3%, totaling approximately $4.8 billion. This decline was observed across both direct insurers, which saw a modest reduction of 0.1%, and the exclusive reinsurer, which experienced a sharper decrease of 3.9%.

Looking ahead: Challenges and opportunities

While the Moroccan insurance sector continues to expand, its reliance on traditional products and the increasing pressure from non-insurance financial activities may pose risks to long-term growth. The recent performance highlights both opportunities and challenges as the sector strives to maintain its growth momentum while adapting to changing market dynamics and economic conditions.

Overall, with the Moroccan insurance market’s steady performance, the outlook remains positive, but continued innovation and strategic adaptation will be key in sustaining growth in the years to come.