Concentrating half of non-life premiums, motor insurance would record an average growth of 4.1% over the period 2022-2026 to reach 15.8 billion dirhams the last year, according to forecasts by Fitch Solutions. This growth will be supported by the increase in the car fleet, which should reach 4.2 million in 2026. In addition, to improve the branch’s profitability, insurers will act more on levers other than price, analysts believe.
The wave regains strength and hits motorists hard. The most difficult thing is that no one knows when it will come down. The liter of gasoline has continued to rise and is currently around 18 DH. The diesel flamed at 16 DH per litre. If the cost of fuel has quickly driven up expenses related to the use of a vehicle, the other items could be more lenient.
These include insurance. “Rates are unlikely to fluctuate much in a competitive market. Insurers will increasingly focus on reducing claims costs, in particular reducing the incidence of fraudulent claims to improve profit margins in this key area,” Fitch Solutions analysts say in a note on non-life insurance. Concentrating half of non-life premiums, motor vehicles should post average growth of 4.1% over the period 2022-2026 thanks in particular to the acceleration of household equipment. Analysts see sales of new vehicles increasing by 5% on average over the next five years.
“We expect better performance from passenger vehicle sales as incomes rise and more Moroccans are able to afford new cars.” By 2026, the vehicle fleet will exceed 4.2 million, or about 107 cars per 1,000 inhabitants against 94 currently. These engines would support, this year, the 3.8% increase in premiums to 13.4 billion DH (MMDH). They would reach 15.8 billion dirhams in 2026.
Profitability under pressure
It is not for nothing that insurers invest massively in road safety awareness campaigns. They make it possible to reduce road accidents and therefore save lives, but also to preserve the profitability of the branch. This has deteriorated sharply in recent years due to the increase in claims and fraud.
According to market estimates, at least 20% of compensation in the auto sector is fraudulent. Price competition on additional guarantees also contributed to the deterioration of the indicator. Collective and individual measures to curb claims and containment in 2020 have led to a marked improvement in the automotive combined ratio. However, much remains to be done to ease the pressure on the branch’s profitability.
Health insurance: 3.6 billion dirhams in premiums by 2026
The increase in household income, private health spending and innovation by insurers should ensure a constant increase in premiums in the medium term, forecasts Fitch Solutions, which anticipates an average increase of 4.7% over the period 2022-2026. They would total 3 billion dirhams in 2022 before rising to 3.6 billion dirhams in 2026 with a market share (non-life segment) stable at 11% over the period.
Franck Fagnon / ECO Inspirations