Regulatory amendments, simplification of procedures, annual survey….
After a forced shutdown in 2020, the Casablanca Insurance Rendezvous is back. This 7th edition, which kicked off on Wednesday March 31, deals with inclusion in insurance and resilience to pandemics. This topical issue triggers reflection on a new insurance model adapted to the challenges of the Covid era. “Unfortunately, the economic crisis caused by the pandemic has not spared the insurance industry. Although it seems today less impacted than other sectors of activity, we will probably not feel the real repercussions of this health crisis until several months, even several years later, ”underlines in this sense Mohamed Hassan Bensaleh, president of the Moroccan Federation of Insurance and Reinsurance Companies. “Indeed, the Covid pandemic has exposed social and economic vulnerabilities.
It has indeed accentuated the precariousness of a large mass that does not have safety nets. The lessons learned from this situation thus reinforce the provisions of the national financial inclusion strategy, which makes insurance a main pillar. The financial inclusion project from its “insurance” angle focuses on the promotion of inclusive insurance ”. A definition has been given in this sense, in particular that emanating from the International Association of Insurance Supervisors (IAIS). This body sees inclusive insurance as “any insurance product aimed at excluded or underserved market segments in general rather than exclusively targeting the poor and low-income people in a narrow sense”. On the social level, inclusive insurance would effectively contribute to the protection of the population against the diversity of risks by allowing them to seize opportunities and secure their livelihood. In this context marked by uncertainties, major challenges are facing the insurance sector.
A major project is now open under the aegis of ACAPS, thus making it possible to provide adequate responses to the needs of the population in terms of social protection in accordance with the High Royal Guidelines. The authority is currently considering the introduction of regulatory amendments that will promote the simplification of microinsurance contracts through the limitation of exclusions, a reduced compensation period and a simplification of the procedures for managing contracts and declarations in the event of of disaster. Added to this is the expansion of distribution channels, particularly through payment institutions. This commitment is also supported by an undeniable effort in financial education. It is also planned this year to launch an annual survey on the penetration of microinsurance in Morocco. This tool will make it possible to establish a barometer and a precise inventory to monitor the real impact on target populations as well as the measures taken to adjust them.
Note that Morocco participates with three other countries (Argentina, India and Rwanda) in the Inclusive Insurance Lab (AII). This international program aims to build capacity in inclusive insurance. The opportunity is to develop innovative solutions to advance the development of the insurance markets of the three countries and more particularly the inclusive insurance segment. It should be remembered that the national insurance sector showed resilience in 2020. Non-Life premiums recorded an increase of 2.8% while the Life branch recorded a slight drop estimated at 0.3%. Despite this resistance, the sector continues to face structural problems, particularly in terms of premium collection and depreciation of its assets. Insurance companies have, however, lost around 31% of their unrealized capital gains in fiscal year 2020.
Abdellatif Jouahri lists the challenges
For the governor of Bank Al Maghrib, the insurance sector is now facing paradigm shifts and profound changes, some of which were initiated long before the crisis. The first challenge is the low level of interest rates. “In the national context, low rates combined with the narrowness of the stock market constitute a real challenge for the development of savings and certain segments of insurance, issues of which we are well aware at the central bank, and which are part of the criteria for drawing up monetary policy decisions, ”notes Abdellatif Jouahri. The second challenge cited is none other than climate change. The wali of the central bank believes in this sense that insurers must take into account the greening of the financial sector. “In this sense, insurance players are called upon to adapt and take ownership of this trend instead of being subjected to it in the years to come. For them, it is a double challenge, to take into account the impact on the environment in their decisions, in particular of investment, but also to develop an offer making it possible to protect or hedge against climate risks. These are also often systemic in nature and coordination with public actors within the framework of public-private partnerships would be the best framework for their management, ”he said. The third mutation noted is that of digital transformation. “Insurance of course is not on the margins of this revolution. It is called upon to apprehend it in order to adapt its organization, improve its products and its marketing methods ”, indicates Mr. Jouahri. He added that “the deluge of data generated by this transformation allows the industry today to better assess the risks and to design personalized offers at a fair price”. The wali of Bank Al Maghrib underlined in this regard a major challenge to be taken into consideration in terms of digitization. This is in fact cybercrime which certainly turns out to be a threat for operators but which could constitute an opportunity for insurers because it will allow them to design and offer insurance offers, which represents a market potential that remains to be developed.
The CVE looks at inclusive insurance
This was noted by Mohamed Benchaâboun, the next meeting of the economic watch committee scheduled in a few days will be an opportunity to take new measures, some of which concern the insurance sector. Referring to the Minister of the Economy, Finance and Administrative Reform, these measures aim to promote inclusive insurance, which can develop rapidly by relying on new distribution channels, such as insurance establishments. payment, digital or mobile payment. “Other more structuring measures for the promotion of inclusive insurance will be introduced in the next amendment to the insurance code with the aim of further regulating these new products to which other incentives could be granted”, underlines the Minister. For Mohamed Benchaaboun, inclusive insurance, and more particularly microinsurance, “constitutes one of the main levers insofar as it makes it possible to reach even the most disadvantaged, who are moreover the most vulnerable to risks”. And to specify that “this insurance can have a big boom thanks to the innovation and the technology which can contribute to reinvent other forms of social protection answering new needs expressed by unemployed people who create their business, by retirees benefiting from a modest pension, low- or medium-skilled self-employed workers suffering from significant fluctuations in income ”. The Minister also underlined during his speech the social aims of microinsurance, particularly in terms of protection of populations who historically do not have access to traditional insurance.
Insurance, a major player in resilience
For Mohamed Hassan Bensaleh, president of the Moroccan Federation of Insurance and Reinsurance Companies (FMSAR), “the challenges of inclusive insurance have never been so topical in view of the magnitude of the socio-economic crisis. economic. Insurance can make a real difference by making households more resilient and fostering entrepreneurial activity. Uninsured risks are undeniably a brake on socio-economic growth ”. It should be noted that a whole section is dedicated to the insurance sector as part of the national financial inclusion strategy in operation since 2019. “The first successful experiences have already emerged and we can congratulate ourselves on them. They come in addition to the great achievements launched several years ago with assistants in collaboration with microcredit insurances ”, we learn from the president of the FMSAR. And to conclude that “traditional distribution channels are not always suitable for microinsurance. We must be creative and draw inspiration from the successful international experience ”. For Mr. Bensaleh, the challenge is to set the right limit between microinsurance and traditional insurance and to keep the traditional networks as reference distribution channels for provident and damage coverage which requires expertise and advice.
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