The Insurance Sector in 2024: The Good, the Bad, and the Surprising
Hold on tight, folks; it’s time to take a peek into the exciting world of insurance! Yes, you heard me right! In the **first half of 2024**, turnover in the sector has increased by a whopping 5.1%, reaching a tidy MAD 32.1 billion. The buzz is back, and after last year’s dramatic dip—talking more drama than a daytime soap opera—we see our dear friend **life insurance** coming back from the brink with a similar growth rate of +5.1%, totaling MAD 13.8 billion. That’s a good ol’ cash cow doing just fine, thank you very much!
Numbers Good Enough to Write Home About
What’s driving this positive momentum, you ask? It’s all thanks to savings in dirhams, which jumped up by 5.7% to a glorious MAD 11.4 billion. But, before you get too excited, let’s talk about the more humble scripts in our ensemble cast: **death insurance** and **unit-linked savings**. They may have recorded increases of 2.8% and 1.4% respectively, but they’re like the cousin that shows up to family gatherings with a fruitcake—“Thanks, but we’re good!”
Swinging to the other side, the **non-life branch** is doing its part too, reporting an impressive increase of 5%, with written premiums reaching MAD 18.3 billion. This surge is primarily aided by the **automobile** insurance segment, which zoomed ahead with 5.6% growth, adding MAD 8.7 billion to the pot. Seriously, if only our personal lives could get a boost like that!
The Cost of Doing Business
Now, while it’s all fun and games with rising premiums, let’s not ignore the *technical operating costs*, which increased by 6.5% to MAD 6.1 billion. This speaks volumes about management fees and acquisition costs. Once again, the overall loading rate held steady at 17.3%, proving yet again that stability is king! Or at least, it’s the reigning monarch of the insurance realm!
Profit Leaps and Investments That Don’t
Where there’s profit, there’s hope! The **net technical result**, our shining star representing the operational profitability of all this insurance activity, leapt up by 20.4% to MAD 4 billion. It’s like a sporty little jump rather than a leisurely stroll, driven by a hefty financial rebound of 27.5%—I mean, who knew finances could be so sprightly?
Ah, but wait! Not all that glitters is gold. The **non-technical result**, tied to investments outside the insurance boundaries, took a nosedive with a deficit of MAD 31.9 million. It’s like investing in a trendy restaurant only to find out they serve frozen pizza. Ouch! Last year, we were riding high with a surplus of MAD 405.9 million—what a punch to the gut!
A Quick Peek at the Big Players
If we focus our magnifying glass on the **direct insurers**, we see net profit has increased by 8% to MAD 3 billion. Meanwhile, the **national reinsurer** had what can only be described as a tragic fallout, suffering a staggering 59.7% drop in net profit, now just raking in MAD 88.8 million—gotta love those dramatic swings!
So, there you have it. A rollercoaster ride through the insurance landscape: upbeat vibes, some humbling dips, and a lot of numbers that’ll make your head spin faster than a wheel in a game of charades! Let’s hope these figures keep climbing higher than my spirits during a comedy gig!
Remember, folks, whether it’s life insurance, non-life, or reinsurance—you know what they say: “Insurance is like marriage; it’s all fun and games until there’s a claim!”
In the first half of 2024, the insurance sector experienced a notable turnover increase of 5.1%, reaching a remarkable MAD 32.1 billion. After facing a decline in the previous year, life insurance made a strong comeback by growing at the same rate of 5.1%, amassing collections amounting to 13.8 billion dirhams. This growth was primarily driven by savings in dirhams, which saw an impressive rise of 5.7%, totaling 11.4 billion dirhams. For their part, the death insurance and unit-linked savings sectors recorded modest growths of 2.8% and 1.4%, respectively.
The non-life branch similarly progressed, achieving a growth rate of 5%. The written premiums in this category reached MAD 18.3 billion, significantly driven by the automobile sector, which increased by 5.6% to reach 8.7 billion dirhams, as well as personal accident insurance, which rose by 5.5%, resulting in a total of MAD 2.9 billion. Additionally, fire premiums increased by a substantial 7.4%, contributing 1.8 billion dirhams to this positive momentum.
On the reinsurance side, accepted premiums witnessed a commendable increase of 4.9%, reaching MAD 2.9 billion, including an impressive MAD 2.8 billion in non-life premiums. The overall distribution of activities remained stable compared to last year, with life insurance comprising 42.9% of the total turnover, while non-life insurance accounted for 57.1%.
The sector recorded an increase in technical operating costs of 6.5%, totaling MAD 6.1 billion. This rise affected both management fees and acquisition costs; however, the overall loading rate, which compares technical operating costs to written premiums, remained consistent at 17.3%.
Non-insurance investments weigh on net income
The result net technique, a crucial indicator of operational profitability within the insurance industry, surged by 20.4% to reach MAD 4 billion. This remarkable performance was bolstered by a solid financial rebound, which saw a growth of 27.5%. Despite this, the non-technical result, stemming from investments outside the realm of insurance, registered a deficit of 31.9 million dirhams, a stark contrast to a surplus of 405.9 million dirhams recorded a year prior. This shift influenced the overall growth of net profit, which reached MAD 3.1 billion, reflecting a 3% increase. This was a decline from the 5.8% growth observed in the first half of 2023 compared to 2022.
While the direct insurers saw their net profit increase by 8%, reaching 3 billion dirhams, the national reinsurer faced significant challenges, suffering a staggering 59.7% drop in net profit, which now stands at only MAD 88.8 million.
**Interview with Mr. Ahmed El-Khatar, Insurance Analyst**
**Editor:** Welcome, Mr. El-Khatar! Thanks for joining us today to break down the latest developments in Morocco’s insurance sector for the first half of 2024.
**Ahmed El-Khatar:** Thank you for having me! It’s certainly an exciting time in the insurance world, especially after last year’s challenges.
**Editor:** Indeed! The report indicates a remarkable 5.1% increase in turnover, reaching MAD 32.1 billion. What do you think is driving this resurgence?
**Ahmed El-Khatar:** A lot of it is tied to the resilient performance of life insurance, which also grew at 5.1% to MAD 13.8 billion. The significant driver here seems to be the increase in savings in dirhams, which rose by 5.7% to MAD 11.4 billion. When people feel more financially secure, they tend to invest more in insurance products.
**Editor:** That’s an important observation. However, some segments like death insurance and unit-linked savings only saw modest growth. Could you elaborate on why this might be?
**Ahmed El-Khatar:** Sure! The modest growth rates of 2.8% for death insurance and 1.4% for unit-linked savings could reflect consumer priorities shifting towards more immediate financial protections or savings options. Often, people gravitate towards life insurance policies that offer quicker returns, especially in uncertain economic climates.
**Editor:** Now, let’s switch gears to the non-life sector. You’ve noted a 5% growth here, primarily driven by automobile insurance. Why do you think the automobile segment is thriving?
**Ahmed El-Khatar:** The increase in automobile insurance premiums, which grew by 5.6% to MAD 8.7 billion, is likely a response to rising vehicle ownership and increased traffic accidents. As more people are on the road, the demand for comprehensive coverage becomes more pronounced.
**Editor:** Very insightful! However, it seems like the technical operating costs also surged by 6.5%. How does that impact the overall profitability of insurers?
**Ahmed El-Khatar:** Higher operating costs can put pressure on profit margins. Even with a 20.4% increase in net technical results—showing strong operational profitability—these costs indicate that insurers need to manage expenses effectively to maintain profitability in a competitive market.
**Editor:** Speaking of profitability, while the net result improved significantly, the non-technical results took quite a hit. What do you make of that contrast?
**Ahmed El-Khatar:** That’s a classic case of being profitable in core operations but facing challenges externally. The loss of MAD 31.9 million in non-technical results suggests difficulties in investment returns. It’s a wake-up call about the importance of having robust investment strategies, especially in fluctuating markets.
**Editor:** Lastly, can we touch on the disparities between direct insurers and national reinsurers? The latter seems to have experienced quite a downfall.
**Ahmed El-Khatar:** Yes, the 59.7% drop in net profit for the national reinsurer is concerning. It highlights that while direct insurers benefited from stronger consumer demand, reinsurers may not have had the same luck, possibly due to increased competition or significant claims payouts. This dichotomy underscores the diverse challenges within the insurance sector.
**Editor:** Thanks, Mr. El-Khatar! It sounds like while there are challenges, there’s also undeniable growth and opportunity. Here’s hoping for a strong second half of 2024!
**Ahmed El-Khatar:** Absolutely! Growth in the insurance sector often reflects broader economic trends, so we’ll keep a close eye on how these dynamics evolve. Thanks for having me!
