How Tunisian Govt, Regulators Working To Ease Pressure On Insurers
The head of the General Insurance Committee (CGA), Mr Hafedh Gharbi, which is under the Finance Ministry, has said that he would hold meetings at the regulatory unit to introduce measures to alleviate the pressures faced by insurance companies.
Speaking to the newspaper Al-Shorouk, Mr Gharbi indicates that the challenges confronting insurers include inflation and the impact of the Russia-Ukraine war.
Referring to motor insurance, he said, “The prices of some types of cars and auto spare parts have increased by more than 50% in the Tunisian market.” The motor branch is important because it accounts for almost half of the overall insurance market in Tunisia.
Among the decisions expected to be taken is a reduction in the reserve rate, which currently is 4% of the value of premiums annually.
The regulator may also issue a decision allowing insurance companies to suspend the distribution of dividends as was the case when the COVID-19 pandemic broke out in 2020.
Market grows by 8% in 2021 despite COVID-19
The Tunisian insurance industry posted an increase of 8% in total premiums to TND2.9bn ($981m) in 2021, compared to 2020, according to data from the CGA.
The industry managed to achieve these modest results despite a deterioration in most economic indicators affected by the impact of the COVID-19 pandemic, says a report on the industry performance carried on the news website lemaghreb.tn.
The CGA data show that non-life insurance sector commanded the lion’s share of the market, raking in TND2bn in premiums in 2021 which represents growth of 7% (2020: 5%).
Motor
Non-life insurance business was supported mainly by the motor insurance branch which accounted for more than 50% of total premiums in the general insurance segment and 43% of the overall insurance market. The motor insurance business in turn was driven by a 24% surge in the number of vehicles sold in 2021.
The CGA data also show that insurers paid claims and benefits totalling TND1.5bn in 2021, 11% higher than in 2020. It is noteworthy that the amount of compensation paid by Tunisian insurance companies decreased by 20% in 2020, compared to 2019, due to COVID-19 when there were lockdowns that led to a reduction in the use of cars and, consequently, lower accident rates.
