Morocco’s insurance sector managed to maintain its growth in 2023, despite the rise in interest rates, albeit at a
more moderate pace.
Turnover in the Moroccan insurance sector rose slightly by 3.9 percent to MAD 55.9 billion (€5.2 billion) at the end of 2023. This growth was mainly driven by a 5.8 percent increase in the non-life branch, according to a Bank Al-Maghrib (BAM) press release issued at the end of the 19th meeting of the Coordination and Monitoring Committee for Systemic Risks (CCSRS), held on Tuesday in Rabat.
However, growth in life insurance slowed significantly, rising by just 1.8 percent, compared with an average of 11.9 percent over the past ten years. This slowdown was mainly due to the performance of the savings segment.
In terms of profitability, the insurance sector achieved a net book profit of 4.2 billion dirhams, up 6.2 percent, bringing the rate of return on equity (ROE) to 9.6 percent. The ratio of unrealised capital gains on investments improved to 9.3 percent against a backdrop of stock market recovery, which had a positive impact on the sector’s
solvency margin, which reached 330.4 percent, compared with 312.7 percent the previous year.
This margin, calculated according to the current prudential regime, remains above the regulatory threshold, but for the time being covers only the underwriting risk.
Furthermore, the CCSRS indicates that the stress tests carried out show the overall resilience of insurance companies in the face of unfavourable macroeconomic and technical conditions.
As regards the pensions sector, the main basic schemes continue to experience a difficult financial situation. The Committee believes that the latest resolutions on salaries adopted as part of the social dialogue of 29 April 2024 will slightly delay the exhaustion of the reserves of the Civil Pension Scheme of the Caisse Marocaine des
Retraites (CMR-RPC) and the Collective Retirement Allowance Scheme (RCAR), without however ensuring their long-term viability.
For the general scheme of the ‘Caisse Nationale de Securite Sociale’ (National Social Security Fund, CNSS), the reduction in the minimum contribution period to obtain a pension, from 3,240 to 1,320 days, will bring forward by a few years the appearance of the overall deficit of the scheme and the exhaustion of its reserves.
The CCSRS therefore considers it essential to implement the systemic reform of the pension sector, which provides for the creation of two poles, one public and the other private, in accordance with the strategic guidelines defined by the aforementioned social dialogue agreement. This reform should make it possible to improve the pricing of schemes in order to absorb a large part of their uncovered past commitments.
At this meeting, the Committee examined and approved the financial stability report for 2023 and reviewed progress on the financial stability roadmap covering the period 2022-2024. It also reviewed the conclusions of the work of its monthly sub-committee and noted that the monitoring indicators continue to show the solidity and resilience of the Moroccan financial sector.
MN/te/fss/as/APA