Nejla Harrouch, General Manager, Assurances BIAT: Interview

Nejla Harrouch, General Manager, Assurances BIAT

Interview: Nejla Harrouch

How did the insurance sector evolve in 2016?

NEJLA HARROUCH: The major evolutions within the field of insurance in Tunisia have been linked to sector agreements and the progress of the legal framework. The main focus following the revolution at the end of 2010 has been to restore the notion of profitability. Regulations were also needed to avoid a price war, which would have completely destroyed the added value of the sector. The main idea in 2016, which will prevail in 2017, has been to normalise prices and set up fair competition based on the actual costs of risks.

Tunisia is a small country of about 11m inhabitants, and it is a small market, where the penetration rate remains low. Yet, there are 22 insurance companies that are forced to fight over similar segments. If we want the insurance sector to develop without threatening its solvency, we need to increase risk coverage. For example, comprehensive home insurance is not generalised in Tunisia, unlike in many other countries.

What are the obstacles that continue to limit the development of the insurance sector in Tunisia?

HARROUCH: The market, which targets private individuals, is still limited to mandatory insurance, such as motor vehicle insurance and life insurance, which people subscribe to when they are granted a credit. In the case of home insurance, which isn’t mandatory, the main issue is the size of the distribution network. It costs a lot of money to cover the whole country. It is insurance that is sold at a very low price, with a small margin for insurance companies. In most cases, offering this type of insurance is just not profitable enough for the firms. One important measure that the sector has been pushing in 2016 is the broadening of banks’ competencies in terms of insurance. So far, banks active in the insurance sector are legally limited to four segments — life insurance, assistance, agricultural insurance and credit insurance. Widening their activities towards the coverage of private individuals or small and medium-sized enterprises would make sense as banks do have the network and the capacities to cover these risks at reasonable costs. This would help consumers to protect themselves against life’s risks at lower costs.

How could the development of the life insurance segment help finance the economy?

HARROUCH: In 2016 life insurance represented only 20% of insurance sector turnover, which is a pity, because it could be an important component in the financing of the economy. For the moment however, insurance companies only use these resources in riskless investments, such as Treasury bonds or bonded loans into companies that have a very high solvency rate. If life insurance products could be developed further, it could allow the insurance sector to not only inject these funds in established companies, but also boost riskier parts of the economy. That being said, insurance companies historically invest with a longterm perspective, when they participate in a company, because they have no interest in speculating. Finally, there is another axis of development, namely micro-insurance. The legal framework is not settled yet, but it could help small businesses to blossom.

How can insurance companies further improve their management of risk?

HARROUCH: Risk evaluation is a key topic for the sector. We all have been working on expanding our knowledge of sensitive segments such as motor vehicle risk. Private individual risk management and corporate risk management are two very different things, which require specific research. We can now see that the legal framework is evolving in a way that encourages a better understanding of risks.

On the other hand, this legal framework should evolve and free the costs imposed on some guarantees. For example, civil liability is currently the guarantee where costs are the most under-evaluated in Tunisia.


You have reached the limit of premium articles you can view for free. 

Choose from the options below to purchase print or digital editions of our Reports. You can also purchase a website subscription giving you unlimited access to all of our Reports online for 12 months.

If you have already purchased this Report or have a website subscription, please login to continue.

The Report: Tunisia 2017

Insurance chapter from The Report: Tunisia 2017

Previous article from this chapter and report
Tunisia sees growth in new insurance product lines
Next article from this chapter and report
Reforms to the car insurance segment in Tunisia

Articles from this chapter

This chapter includes the following articles.
Cover of The Report: Tunisia 2017

The Report

This article is from the Insurance chapter of The Report: Tunisia 2017. Explore other chapters from this report.

Covid-19 Economic Impact Assessments

Stay updated on how some of the world’s most promising markets are being affected by the Covid-19 pandemic, and what actions governments and private businesses are taking to mitigate challenges and ensure their long-term growth story continues.

Register now and also receive a complimentary 2-month licence to the OBG Research Terminal.

Register Here×

Product successfully added to shopping cart