Life Insurance in Morocco Surges with Attractive Tax Regime and New Category of Savers

Supported by a very attractive tax regime, life insurance is driven by the success of savings investments among the middle classes, but not only. A new category of savers, employed among small traders, is emerging.

Good news for bookies. Life insurance works like a charm. The latest figures from the Insurance and Social Security Control Authority (Acaps) confirm that this sector has recovered in a dynamic insurance market that grew 4.6% to MAD 57 billion last year.

With at least MAD 21.3 billion in collected premiums in 2023, life insurance is supported by a very attractive tax regime that means complete exemption from capital gains after eight years. This partly explains the success of household savings investments. To this end, it is also relevant to produce thousands of retirement savings policies by liberal professions as well as private and public sector officials with banking networks.

And for good reason, they provide benefits when they leave including reduction and distribution, subject to compliance with the condition of the minimum age of 45 years and a duration of 8 years. Not all of these savings are necessarily set at the highest level in the organizational charts. In fact, more and more workers and small business owners are investing a portion of their income in social security products to maintain their standard of living in retirement.

This awareness shows how attractive retirement savings are. But not only that, because the competition between insurers and pension funds to capture this market is very strong. In general, the activity has shown consistency over the last ten years even if the insurance penetration rate is still low, at 3.93% in 2022. Enough to reassure both professionals and saving Savers who use the banking network more to subscribe to bankssurance products. Moreover, the operation has performed well in recent years.

Banking: ramp up confirmed
Bancassurance activity is gradually returning to its pre-covid-19 growth rate, showing double-digit growth, according to the results generated from 2021. Therefore, for the financial year 2022 (the numbers latest available), this activity saw an increase of 13.2%.

As a result, the number of insurance premiums drained through this channel reached MAD 18.3 billion, higher than, for the first time, the insurance brokers, according to ACAPS. In detail, the contribution of bancassurance increased over the last three financial years from 30% in 2020 and 2021 to 32% in 2022.

On the other hand, the contribution of insurance brokers fell, over the same period, from 33 to 31%. The observation is the same for insurance agents who increased activity from 24% in 2020, then 23% in 2021, to settle at 22% in 2022. As for direct management offices, their share increased from 13% in 2020 to 15% in 2022.

Life insurance and capitalization control the activity
In terms of lines of activity, life insurance and capitalization continue to dominate this sector with a production of MAD 17.6 billion, or 96.4% of bank guarantee collections. The rest is mostly done with help. We note that the banking sector is still, like other financial years, the most dynamic – according to the ACAPS report covering the financial year 2022 – in the distribution of insurance products.

In fact he captured MAD 18.2 billion in premiums and collected 99.6% of the contribution, at a time when other bank channels, especially financing companies and micro-credit associations, contribute little, to the tune of MAD 73.2 million. Regarding the commissions that were wages for bancassurance activities, they stood at MAD 478.4 billion, an increase of 8.1%.

Over the past three years, we see that the activity maintains its dynamic growth, going from a volume of prices of 13.69 billion dirhams in 2019 to 13.7 billion dirhams in 2020 , 16 billion dirhams in 2021 and 18.3 billion dirhams in 2022, again according to the ACAPS report. In terms of growth rate, there is a double-digit increase, i.e. 17.4%, from 2020 to 2021 and 13.2%, from 2021 to 2022. As a result, the average annual growth rate (CAGR) is established at 15.3% with thanks especially to life insurance and capitalization, which is in charge of this department.

Sami Nemli / ECO Inspirations

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