Following a muted performance in 2017 on the back of sluggish growth in the wider economy, market players in Algeria’s insurance industry anticipated that improved conditions in 2018 would support a sector recovery, a view partially borne out by the sector’s performance in the first half of 2018. A particular bright spot is the life segment. Although it accounts for just 10% of the overall sector and witnessed a dip in premium growth in the first half of 2018, the value of written life premium has doubled since 2011 and is expected to expand at a greater rate in the coming years as the population becomes more aware of its potential benefits. As with many sectors, state-run insurers continue to dominate, with the four biggest public sector players capturing about 63% of the market. Although private providers have begun to make modest advances into the market, there have been no major new entrants in recent years, and the sector dynamic remains largely unchanged.


The primary responsibility for regulating and overseeing the insurance sector lies with the Ministry of Finance (MoF). Within the ministry, the Insurance Department is responsible for establishing the overarching policy and legislative framework. The most important legal instrument governing the sector is Ordinance No. 95/07, first issued in 1995 and later amended by Law No. 06/04 in 2006. The 1995 reform allowed private sector participation in the industry for the first time, while the 2006 amendment established a legal separation between life and non-life providers. The latter has been strictly enforced since 2011, since which time a small number of life insurance specialists have entered the market. The 2006 reform also created a legal framework that would allow bancassurance firms to operate, though serious development considerations have not taken off until recently. “The authorities and insurance players are moving forward on bancassurance to revise the application texts of the Insurance Law of 2006 and build up a competitive framework for this segment in Algeria,” Brahim Kassali, CEO of state-owned insurer Compagnie Algérienne d’ Assurance et de Réassurance (CAAR), told OBG.

The amendment further established the Insurance Supervision Commission under the MoF to provide oversight for the sector and license new market entrants. The MoF also manages the Fonds de Garantie Automobile, which indemnifies victims of auto accidents when the person culpable is either uninsured or has not been found, and the Fonds de Garantie des Assurés, which protects the clients of insurers should the latter go bankrupt and cannot pay claims.

Distribution Channels

Most insurance is contracted through the traditional channels of agencies or brokers. The number of agencies mushroomed from 874 to 2358 between 2000 and 2017, meaning that there is one agency per 18,000 inhabitants compared to one per 28,000 a decade earlier. There are 37 licensed insurance brokers operating in the country, with no new entrants since February 2016.

Major Players

The non-life segment is dominated by five providers, four of which are private companies and one, Caisse Nationale de Mutualité Agricole (CNMA), a mutual company, which have seen only very minor shifts in their respective market shares. Société Algérienne d’Assurance (SAA) is the largest player, with a market share of 22.7% in 2016 – the latest year for which data is available – 0.6 percentage points below what it was in 2015. SAA is followed by Compagnie Algérienne des Assurances (CAAT), which in 2016 narrowed the gap to the market leader, increasing its market share from 18% to 19.1%. CAAR is in third, commanding 12.7% of the market in 2016, down from 14.1% a year earlier, while CNMA, in fourth, accounted for 10.7%, up from 10.5% in 2015. The fifth-largest player Compagnie Algérienne des Assurances des Hydrocarbures, which specialises in the hydrocarbons sector, controlled 8.4% of the market in both 2015 and 2016.

Collectively, the market share of these five providers fell only marginally over the period, from 74.4% to 73.6%. A further eight private sector non-life insurers, including specialists in Islamic insurance products, shared the remaining 16.4%. By contrast, the life segment has eight market participants in total, six of whom have captured shares ranging from 12.7% to 19.5%. Taamine Life Algérie, a subsidiary of CAAT, retained its position as market leader in 2016, despite its share slipping from 21.2% to 19.5%. Caarama Assurances, a subsidiary of CAAR, narrowed the gap to the top by seven percentage points to 18.4%, while a marginal increase by Cardif El Djazaïr, which is owned by French firm BNP Paribas, from 15.5% to 15.7%, was enough to retain third position. Cardif El Djazaïr was closely followed by Société d’Assurance de Prévoyance et de Santé, which increased its market share from 14.7% to 15.1%. AXA Assurances Algérie, in fifth position, saw the largest gain in that year, increasing its share from 12.8% to 13.8%, and overtaking Macir Vie, which saw its own stake slip from 13.5% to 12.7%.

There have been no market entrants, exits, mergers or acquisitions of note in recent times, in either the life or non-life segment. The last player to join the ranks was the Algerian Gulf Life Insurance Company in 2015, which managed to capture 0.3% of that segment in 2016 under its L’Algerienne Vie brand.


Having experienced double-digit growth in the decade to 2014, premium has advanced at a more modest pace in recent years due to challenging economic conditions weighing on the sector. After posting nominal increases of 2% in both 2015 and 2016, premium expanded by 3.2% to reach AD133.7bn (€970.7m) in 2017. Nonetheless, this was the third year running that premium growth failed to outpace inflation, which was 5.6% in 2017. In early 2018 stakeholders were hopeful that continued growth would allow the sector to buck the trend of recent years by growing at a rate faster than both inflation and GDP. According to provisional data from the National Insurance Council (Conseil National des Assurances, CNA) as of the end of June 2018 premium was on course to surpass the previous year’s total, at AD73.3bn (€532.2m), but the pace of growth was slower than expected, at 4.7% year-on-year (y-o-y) – below the IMF’s average annual inflation estimate for the year, which was 6.5%.

Market Penetration

According to the 2018 Swiss Re “World Insurance Report,” insurance premium reached 0.72% of GDP in 2017, approximately one-fifth of the level seen in Morocco (3.49%) and a third of that seen in Tunisia (2.04%). Although overall insurance penetration was slightly ahead of Egypt on 0.68%, the structure of the two markets is very different. Algeria’s life segment has shown strong premium growth in recent years but started from a very low base, so that by 2017 it accounted for just 0.07% of GDP, compared to 0.33% in Egypt, 0.42% in Tunisia and 1.43% in Morocco. This underscores the life segment’s considerable potential for growth. By contrast, insurance penetration in the larger non-life segment stood at 0.65% of GDP, nearly double that of Egypt on 0.35%, but still lagging behind Tunisia (1.62%) and Morocco (2.06%).


The penetration pattern is mirrored in the density statistics, which compare the premium per capita across markets in US dollars. At $29, Algeria’s insurance density is ahead of Egypt, at $16, but less than half of Tunisia ($71) and less than one-third of Morocco ($104), even though Algeria’s GDP per capita is higher than all three. Again, these figures illustrate how Algeria’s insurance sector remains relatively skewed towards the non-life segment, despite rapid growth rates in life in recent years. At $27 per capita, non-life insurance density in Algeria is closer to neighbouring Tunisia, at $56, and Morocco ($61), but its life insurance density of $3 is about one-fifth the level of Tunisia ($14) and one-fourteenth the level of Morocco ($43).


The life segment has continually outperformed the non-life segment in terms of premium growth in recent years. In 2017 life premium increased by 20% to AD13.4bn (€97.3m), far ahead of inflation and underlying economic growth, and enough to see it increase its overall share of insurance premium to 10%, up from 9% the previous year. Non-life premium, meanwhile, increased by 2% to AD121.6bn (€882.8m).

However, the life segment’s performance in the first half of 2018 bucked this trend. Life premium fell by 7.7% y-o-y to AD6.5bn (€47.2m), reducing their share of overall premium to 8.9%, while non-life premium grew by 5.1% to AD64.5bn (€468.3m). This was due in large part to a decline in life and death insurance, the segment’s largest category. Life and death premium fell by 22.1% y-o-y in the January-June period due to a decline in sales of term life insurance products. The assistance and accident subsegments also saw reductions in premium growth, of 9.5% and 8.4%, respectively.

Market players, however, emphasise the overall robustness of the segment and its potential for further expansion. “Since the first specialised providers entered the market in 2011, the amount of life insurance has doubled from AD6.7bn (€48.6m) to almost AD13bn (€94.4m) in 2017 and its share of the sector has increased from 8% to nearly 10%,” Youcef Benmicia, CEO of CAAT, told OBG. “But there is still a need to promote awareness among the population of the benefits of the product to ensure it becomes a more mainstream option.” The eligible working population in both public and private sectors, including the self-employed since 2015, have traditionally relied on the state to provide for them in retirement, so that private pension plans have yet to feature prominently.

Health Insurance

One category of life insurance that has seen significant growth is health. The subsegment registered double-digit premium increases in 2017 and y-o-y in the first half of 2018, at 11.6% and 10.4%, respectively. Health remains the smallest life category in absolute terms, however, accounting for 1% of life premium. More common is collective private health insurance which, despite contracts declining by 20% to 7925, recorded 8.3% growth in premium.

Auto Coverage

Auto insurance has long dominated the insurance sector, accounting for 56% of total premium at the end of June 2018. This is due to the fact that it is obligatory, enforced and relevant to a large proportion of the population.

In 2017 there was a significant shift in this line, due to an increase in the Résponsabilité Civile tariff, which covers insurance of obligatory auto risks, ostensibly to reflect the increased level of claims in recent years. The result was that premium for non-obligatory risks declined by around AD6.1bn (€44.3m) and premium for obligatory risks grew by AD6.3bn (€45.7m). Overall premium growth totalled 0.2%.

The requirement for motorists to insure more risk should mean that this income stream becomes less volatile for insurers, since motorists will not be able to drop discretionary insurance as easily in the face of economic pressures, as has happened in recent years. In the first half of 2018 premium for obligatory risks increased 7.5% y-o-y to AD10.9bn (€468.3m), while non-obligatory risk premium expanded by 2.8% to AD24.9bn (€468.3m). Total auto premium registered 4.2% growth, increasing their share in non-life premium from 53.7% at the end of 2017 to 55.5%. “Paradoxically, the devaluation of the dinar reduced consumer spending power, but at the same time increased the value of the vehicles being insured, leading to an increase in auto premium,” Nordine Tirichine, director of marketing and development at insurance firm Trust Algeria, told OBG.

Given that auto coverage accounts for more than half of non-life premium, and is often the only insurance product that Algerian households may be exposed to, it also shapes public opinion around insurance. In recent years views have been coloured by insurers’ reputation for slow or non-payment of claims, breeding mistrust of the sector more generally.

“Perhaps the single best way to improve insurance penetration would be to clean up the image of the auto insurers by speeding up claim processing,” Rachid Sekak, senior advisor of commercial and investment banking at BRS Consultants, a financial services firm, told OBG. “This would open opportunities for insurers to cross-sell discretionary non-life and life insurance products that have so far been relatively small market niches.”

Climate Change & Crop Cover

Agriculture’s continued importance to the economy – it accounts for some 13% of GDP and employs 11% of the population – means that it has strong growth potential in the insurance industry. At present, the subsegment remains a relatively marginal market niche. A contraction in premium growth in 2017 and in the first half of 2018 saw its share in non-life premium decline by seven percentage points to 2%. Less than 10% of farmers are estimated to have farm insurance, with many citing high prices as the reason for going without. Typically, there is an expectation – and public pressure – that the state will step in to make good any losses, essentially acting as the insurer of first resort. The effect of under-insurance in the sector became apparent with the arrival of a heat wave in mid-2018, which caused large losses to farmers, particularly seasonal fruit growers and poultry farmers.

Despite the challenges, Benmicia told OBG that the insurance sector is becoming more involved in agriculture and has the opportunity to play an important economic role. “Insurance players have a crucial role in supporting the development of local agriculture and industry. Agriculture lacks these services the most because insurance companies aren’t overly engaged in natural risks. However, as more agro-industrial projects are ongoing we can be optimistic this trend will change.”

Reinsurance Potential

One segment of the market gaining much more traction is reinsurance. It posted premium growth of 8.4% in 2017 to AD29.4bn (€213.4m) and at the end of the first half of 2018 was on track to surpass that figure, with AD16.6bn (€120.5m). The majority of all reinsurance business is domestic, and more than one-third (36.5.%) of domestic reinsurance premium relates to fire risk. The second-largest segment is engineering, accounting for 15.6% of domestic reinsurance premium in the first half of 2018. Publicly owned Compagnie Centrale de Réassurance is the only company licensed to provide reinsurance domestically.

Sharia-compliant Products

Although takaful (Islamic insurance) has yet to take off in Algeria, it too has a lot of potential, and the authorities are working to develop it. Takaful products have been available in Algeria since the specialist provider Salama Assurances entered the market in 2000, but as yet there is no dedicated legal or regulatory framework for the segment.

To address this lacuna, the CNA worked with the government to prepare a feasibility study and, subsequently, a draft law that would provide the required legal framework for both non-life and life products, known as general takaful and family takaful. It is expected that the law would also allow general insurers to offer Islamic insurance as part of their portfolios, much in the same way that non-specialist banks are permitted to operate Islamic windows (see Banking chapter). The MoF is understood to be considering the draft law, but it is not expected to be enacted before mid-2019. For this initiative to be a success, it will be necessary to introduce sharia-compliant, fixed-income products at the same time so that insurers can not only issue takaful, but also invest the resulting funds in instruments consistent with their religious obligations.


With a large informal labour market, one-fifth of the workforce dedicated to agriculture, a high prevalence of micro-enterprises and relatively low penetration of traditional insurance products, conditions would appear to be ripe for micro-insurance to blossom, but in fact the segment has yet to establish a meaningful foothold. The introduction of a legal framework for Islamic insurance may provide an opportunity to develop micro-takaful products dedicated to those population segments for whom their faith has heretofore caused them to avoid traditional insurance. “There is a great need and opportunity for growth in this segment, but products better tailored to the Algerian market will be essential,” Tirichine told OBG.


Broader macroeconomic performance is expected to govern the insurance sector’s prospects over the coming years. While a modest improvement in economic conditions supported stronger growth between January and June 2018, and was expected to do so in the latter half of the year, the medium-term outlook is more challenging. Economic growth looks set to slow from the second half of 2019 onwards as the authorities move to reduce the budget deficit.

However, efforts to raise awareness of the potential benefits of insurance products should support improvements in penetration levels over the long term. Given its low base, life insurance is expected to remain the more dynamic segment, although other categories such as Islamic insurance and micro-insurance could also gain a greater foothold given further development.