Tunisia sees growth in new insurance product lines


As one of the most developed markets in North Africa, Tunisia’s insurance sector has seen a steady increase in premiums and penetration in recent years, with life and medical insurance segments in particular experiencing notable growth.

On the back of this momentum, the market is turning to diversified insurance products to further increase penetration and profitability. New insurance products such as micro-insurance and takaful (Islamic insurance) are emerging in the market, and established but underdeveloped options such as bancassurance are expanding. The sale of insurance options through the internet, although somewhat constrained by regulatory issues, is also starting to develop, adding to sector-wide potential.


Per capita insurance premiums in Tunisia stood at TD150.50 (€64.54) in 2015, up from TD141.70 (€60.77) in 2014. Tunisia’s insurance market performed well when these figures are compared to its continental peers. According to a survey by Swiss Re conducted in 2015, Tunisia’s per capita premiums stood at $73.10, ranking the country fifth in the 10 African countries studied and second in North Africa, behind Morocco at $90.80 and ahead of Algeria and Egypt with premiums of $31.80 and $23.00, respectively.

According to the latest available figures from the industry representative body Fédération Tunisienne des Sociétés d’Assurance (FTUSA), insurance penetration, or total premiums as a percentage of GDP, reached 1.96% of GDP in 2015, up from 1.88% the previous year and 1.85% in 2013, making the market the sixth largest of countries surveyed and again ranking the second largest in North Africa, behind Morocco, with premiums at 3.05% of GDP.


Tunisian insurance premiums expanded to TD1.68bn (€720.5m) in 2015, an increase of 7.9% in nominal terms from the previous year, according to FTUSA. Between 2010 and 2015 sector premiums expanded by a compound annual growth rate of 8.4%. Market-wide figures for 2016 were not available at the time of writing; however, premiums generated by Tunisia’s listed insurance companies reached TD643m (€275.8m) in 2016, a rise of 7.9% compared to 2015. Société Tunisienne d’Assurances et de Réassurances (STAR), the sector’s largest company by turnover, accounted for 51.48% of the total premiums of listed insurers in 2016, and saw premium growth of 10.1%.

Claims, Costs & Profitability

According to FTUSA, paid claims reached TD941.5m (€403.8m) in 2015, a 13.3% increase from 2014 and well ahead of premium growth of 7.9%. This rise was driven in part by growth in claims in the transport (139%) and life (113%) segments. Despite rising costs, strong investment returns contributed to 2015 being the industry’s most profitable year since 2010, with net technical profits reaching TD161.6m (€69.3m), an increase of 71.3% from 2014. “Insurance companies have invested heavily in bonds in recent years and saw strong investment returns in 2015,” Bassem Neifer, analyst at equity research firm AlphaMena, told OBG. Neifer noted there were indications of higher claims rates in 2016, most notably in the automotive and fire segments, which would likely leave profits flat for the year. Supporting this assessment, STAR saw gross claims growth of 20% in 2016, well ahead of premiums growth of 10.1% for the period.


At the end of 2015 Tunisian insurance companies had a total of TD4.1bn (€1.8bn) of funds under investment, up 11.8% from TD3.67bn (€1.6bn) the previous year, according to FTUSA. This investment generated revenues of TD194.1m (€83.2m) for the year, an increase of around 63.2% from 2014 for a return on investment of 4.7%, up from 3.63% in 2013 and 3.9% in 2014. According to the most recent information from sector regulator General Insurance Committee (Comité Générale des Assurances, CGA), in 2015, 51.4% of funds invested by the industry was in bonds and treasuries, 22% in shares, 17% in the money market or bank deposits, 5.9% in real estate and 3.7% in other assets. Tunisian insurance companies’ investment patterns have changed in recent years in response to shifting economic performance and risk assessments. “Insurance firms traditionally invested quite heavily in real estate, but the market has been stagnating recently, in particular in the commercial segment, and companies have been avoiding the sector,” Rym Gargouri, analyst at Tunisian stock brokerage Tunisie Valeurs, told OBG. Instead, insurers are turning to treasuries and bonds, incentivised by attractive interest rates and more limited exposure to a comparatively more volatile stock market, Gargouri said, adding that rates are likely to continue to rise in the near term.


There are 22 companies operating in the Tunisian insurance market, including five specialist life insurance companies, three takaful providers and a sole reinsurance provider, Tunis Re. STAR had a total insurance market share of 18.2%. The firm is majority-owned by the state, both directly and via Entreprise Tunisienne d’Activités Pétrolières, with French-owned Groupama holding a share of 35%. Compagnie Méditerranéenne d’Assurances et de Réassurances (COMAR), part of Tunisian family-owned conglomerate Amen Group, had the second-highest turnover at 9.6%, followed by Assurances AMI at 8.2%. Assurances AMI pushed GAT Assurances, which had held the third-place spot in 2014, into fourth with a 2015 market share of 7.8%.

Concentrated Market

While there are a large number of companies operating in the sector, the top-five companies account for over half, or 51.3%, of premiums. Smaller firms in Tunisia hold very small market shares, with the smallest, Cotunace and At-Takafulia, holding 0.6% market share each. While the market is concentrated at the top, industry figures say the large number of insurance firms continues to be a hindrance to the development of the sector. “The crowded nature of the market leads to duplication of effort and wasted investment, as well as preventing companies from growing enough to be able to invest more in client services and reaching the critical mass that would allow them to develop networks abroad,” Mehdi Doghri, commercial director at Carte Assurances, told OBG.

Some consolidation may already be in the offing, with Carte Assurances, the country’s eighth-largest insurer by premiums in 2015, purchasing shares in 12th-ranked Salim Assurances, both directly and via its life insurance affiliate Carte Vie. Together, Carte Assurances and Carte Vie have a combined shareholding in Salim of over 20% after an April 2016 acquisition. The CGA has acknowledged the issue, and in October 2016 Hafedh Gharbi, the organisation’s president, said the body will work to promote mergers and consolidate the industry.

Insurance Code

Tunisia’s insurance law has been through several revisions. The insurance code was updated in 2002 and 2005 to include a Motor Vehicle Insurance Act and in 2008 with the creation of the CGA. A legal framework for takaful was adopted in 2015. Then, in January 2017 Ahmed Hardouk, head of the General Insurance Commission, announced plans to revamp Tunisia’s insurance code to strengthen company governance and ensure structures are in place overseeing risk management, damage assessment and technical testing. The new code will also establish a legal framework for life insurance, work toward simplifying insurance contracts and empower the FTUSA to act as a mediator, giving it a remit for handling disputed claims, among other functions. According to Hardouk, the draft will be submitted to Tunisia’s legislature during the summer of 2017 with an aim for implementation in 2018.

Non-Life Segments

Car insurance is by far the largest insurance line in Tunisia, in large part because third-party civil liability vehicle insurance is mandatory. Vehicle insurance accounted for 45.7% of industry premiums in 2015, up from 45.4% in 2014 (see analysis). The second-largest non-life product in 2015 was group health insurance, comprising 14.2% of total insurance premiums. Segment turnover was up by 9.3% in 2015 over the previous year, making the sector the fastest-growing non-life product.

“Health insurance is developing very rapidly in Tunisia,” Doghri told OBG. “The need for coverage is steadily becoming more pressing due to factors such as health care and medicine price inflation, as well as delays in reimbursements from the state health insurance provider,” he continued, adding that demand from companies with large unionised workforces is particularly strong. While group products dominate the health market, Doghri, whose firm in 2011 became the first Tunisian insurance company to provide health coverage on an individual basis, said the individual segment is growing after a slow start. Despite its rapid growth rate, the group health segment made a loss of TD2.3m (€986,000) in 2015. One of the factors that has pushed down technical profitability in the health segment in recent years is fraud, but industry figures say the situation is improving. “Some companies spent a good part of 2015 and 2016 fighting fraud within the health segment, which has led to reduced losses,” Mohamed Ali Jebira, analyst and partner at Deloitte, told OBG. “Most have succeeded in cleaning up their portfolios, which should lead to better financial results in the future.” The next largest non-life lines were miscellaneous risks, accounting for 9.2% of premiums, and fire, with 6.7% of premiums. Both segments grew at rates below the overall market average in 2015, with miscellaneous risks posting 5.1% growth and fire posting 5.3%. Transport, the fifth-largest non-life segment, on the other hand, saw premiums shrink by 2.1%. “Levels of investment in the country have been falling recently, leading to corporate-led insurance lines such as fire becoming weaker,” Gargouri of Tunisie Valeurs told OBG, adding that the new investment law came into force in April 2017 and more positive outcomes are expected from the investment conference held in November 2016 in terms of enhancing the business climate and attracting more investment.

Life Insurance

Life insurance premiums sold in 2015 totalled TD301.9m (€129.5m), up 11.8% on 2014 figures. This made the segment the fastest-expanding insurance line, though growth was down from 17.4% in 2014. The segment accounted for around 18% of premiums in 2015, up from 15.7% in 2013 as a result of its above-average growth rate. A total of 18 companies are active in the sector, including five dedicated life reinsurers. A number of firms have elected to create dedicated life subsidiaries. Combined turnover at these specialist firms stood at TD170.2m (€73m), up 11.7% over 2014, accounting for 56% of total life premiums.

The top-four firms in the segment by premiums were all dedicated life providers. The largest in the segment is Attijari Assurances, a unit of Moroccan financial group Attijariwafa, with premiums of TD47.6m (€20.4m) and holding a 15.8% market share. These figures also make Attijari Assurances the 13th-largest insurance company overall. “Attijari has a very aggressive growth strategy and has been taking market share from other firms in recent years,” said Gargouri, adding that its growth is linked to the synergies between the bank’s lending activity and life insurance products. Maghrebia Vie is Tunisia’s second-largest life insurance firm, with premiums reaching TD41.6m (€17.8m), followed by Hayett, an affiliate of COMAR, with TD38.6m (€16.6m) in premiums and Carte Vie with TD29m (€12.4m). The largest generalist insurance provider in the segment, and fifth-largest life insurer overall, was Assurances BIAT, with premiums of TD27.5m (€11.8m).

The segment’s growth potential is high, though Gargouri said recent declines in purchasing power were currently weighing on its short-term expansion. Product diversification is set to help with growth in coming years, in particular with savings-based products. “The life insurance market is currently largely focused on credit products, but there is real potential for other sources of development, such as turning bank savings into insurance-based savings,” said Jebira. “The automobile market, which dominates overall premiums, has a reduced margin and its tariffs are capped by the legislation in force, giving companies a real incentive to enter into or expand their business in the life market,” he continued, noting the segment’s room for growth.


Tunisian insurance firms ceded TD356.1m (€152.7m) worth of premiums to reinsurance firms in 2015, up 2.9% from 2014. This resulted in companies making an overall loss of TD140.2m (€60.1m) on reinsurance operations, up from TD133m (€57m) in 2014. Cession rates were predictably highest in sectors involving comparatively small numbers of large risks such as the fire (74.9%), agriculture (72.4%) and transport (72%) segments. These rates, accordingly, were low in high-volume, small-risk markets such as the group health (2.3%), life (9.3%) and automobile (11.1%) segments. Fire, transport, miscellaneous risks and vehicle insurance accounted for the bulk of cessions.

The sole domestic reinsurer, Tunis Re, took in premiums of TD100.6m (€43.1m) in 2015, up 3% from the previous year and made a return of TD14.4m (€6.2m) for the year, up 57% from 2014. Sales growth was stronger in 2016, Mustapha Kotrane, head of production at Tunis Re, told OBG, adding that turnover for the first nine months of the year was up by almost 20%. Kotrane noted the firm saw growth across all markets, but especially in foreign markets, which account for 39% of Tunis Re’s turnover. The firm is particularly active in other MENA countries. Tunis Re also has substantial margins to expand its business further in terms of its capital and solvency ratios, according to Kotrane, emphasising the company would maintain a highly selective subscription policy. “We are looking in particular at small and medium risks,” he told OBG. “Sub-Saharan African and North African markets look particularly promising, most notably Morocco and Algeria,” he said, noting higher levels of competition in Middle Eastern markets make them less of an attractive option.

Islamic Insurance

Takaful is in the early stages of development in Tunisia, with the first sharia-compliant firm, Zitouna Takaful, launching activities in 2013. Despite the slow start, the segment is growing rapidly. Takaful premiums stood at TD49.3m (€21.1m) in 2015, up from TD29.1m (€12.5m) in 2014 – a 69.4% increase. Tunis Re’s retakaful turnover also grew rapidly over the year, increasing by 52% to TD6.6m (€2.8m). Zitouna is the largest firm in the segment with a 2015 turnover of TD27.3m (€11.7m), followed by 2013 market entrant El Amana Takaful with TD12.5m (€5.4m) and At-Takafulia, which began operations in 2014, on TD9.5m (€4.1m).

Micro & Bancassurance

Another emerging segment with strong potential to drive wider growth is micro-insurance, which was launched in Tunisia in May 2015 when Carte Assurances and micro-lender Microcred signed an agreement to provide death coverage to reimburse the cost of borrowing by Microcred clients should they pass away before a loan is repaid. The venture issued its first insurance contract at the beginning of 2016. While the segment is new, industry figures say that its prospects are bright. “Microcredit has been growing very rapidly in recent years, which should help to boost micro-insurance,” Gargouri noted, adding that more micro-lenders are seeking insurance licences. Hassen Zargouni, chairman of the board at Microcred, said that in addition to generating its own turnover, the line would help Tunisia develop awareness of the importance of insurance in managing risks. “Previously there was no real culture of buying insurance outside of the corporate sector, even in the retail and small and medium-sized enterprise (SME) markets,” he told OBG. “Now people are discovering that even micro-entrepreneurs can obtain coverage.” Together with micro-insurance products, bancassurance distribution offered the highest potential for penetration growth in Tunisia and is already helping to drive industry expansion, according to Gargouri. “Companies linked to banks have been doing comparatively well in recent years and seeing double-digit growth in some cases,” she said, noting this was partly a result of lower competition in the segment given that customers tend to stick with their own banks when they buy such products. Elyes Zormati, commercial director of GAT Assurances, said regulatory changes could help further boost the segment’s prospects in coming years. “Bancassurance is currently limited to life and assistance, but if restrictions on the sale of other products via banks, such as multi-risk home insurance were lifted, it could have major potential,” he told OBG, adding that firms were lobbying authorities for such changes.

Internet Sales

The internet is also emerging as a promising new distribution channel, though its development faces a number of constraints. “Most companies are currently working on their digital strategies,” Jebira told OBG. “However, regulations that require a physical contract signed by the insured party can be a brake for the development of internet sales.” He noted that while there is a law allowing for the use of electronic signatures, in practice many establishments have not yet adopted these enablers. “As a result, customers are still obliged to go to an agency to sign a physical contract, even if they have already bought a product via an app or online,” he said. Gargouri echoed these concerns, adding that companies also need to invest substantially in upgrading their own internal systems in order for digital sales and online transactions to be successful. “Digitalisation has become very fashionable, with lots of companies working on the development of apps, for example,” she told OBG. “However, most companies do not have adequate internal IT and information systems that would allow for real digitalisation. Insurance firms will need to further develop these systems to allow companies, for example, to access data in real time,” noting it could take at least three to four years in most cases.


Segments such as life insurance, bancassurance, micro-insurance and takaful are all expected to grow rapidly. Growth in such lines will help boost overall penetration, but the extent to which the wider sector grows and penetration levels rise will depend in part on trends in investment and the wider economic situation. Efforts to stimulate country-wide investment through policy like the revised investment code are encouraging in this respect. Plans to establish a car insurance risk database (see analysis) and potentially liberalise segment tariffs should help boost profitability further, particularly for companies with the ability to invest in sophisticated actuarial and risk-management tools.


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