Algerian insurance companies wary of French competition

In the wake of a recent agreement concluded between Algeria and France settling pending divergences in the insurance field, national public and private insurance companies have expressed wariness about French insurance firms gaining a solid foothold on the Algerian insurance market.

Observers suggest that the lack of experience of the national insurance companies could cost them a financial downturn in the face of the more seasoned French and European companies in case the latter decide to invest the open Algerian market in the near future.

These foreign companies are expected to cash in on the ongoing all-out liberalisation of the Algerian insurance market.

According to Algerian finance Minister Karim Djoudi, the global turnover recorded in the national insurance sector is less than 1% of the gross domestic product compared with 2 to 3% in neighbouring Morocco and Tunisia.

Latest official figures show that the services, provided by the Algerian insurance companies, all sectors taken together, yielded a turnover of 52 billion dinars in 2007 compared with just 46.5 billion dinars in 2006, that is a hike of 12%.

The insurance companies operating in the public sector have grabbed 67.9% of the national insurance market while the private ones account for only 32.1%.

A case in point is the automobile insurance market which tops the chart in Algeria with a turnover of 18.5 billion dinars, representing 44.5% of the global turnover recorded in the first 9 months of the year 2007.

On the other hand, the turnover registered in the land and air transport sector reached 3.9 billion dinars or an increase of 16.3% compared with the previous year.

However, the insurance services destined to the agriculture sector slightly plummeted in 2007 by recording a 3.2% fallback or a turnover of just 366 million dinars.