The offer of Takaful insurance products remains limited to the guarantees and risks of participatory banking activity, which restricts the size of funds, indicates BMCE Capital Global Research (BKGR) in a dedicated note and whose conclusions are relayed by the daily Le Matin du Sahara et du Maghreb.
The banking sector has a pool of 21.6 billion dirhams of Murabaha financing at the end of December 2023, which corresponds to a target market on the stock to be covered of 86 million dirhams, based on a median rate of 0.4%, explains BKGR in its recent note on the insurance sector in Morocco “Takaful: Mirage or growth relay?”. “This should grow at a rate similar to that of crowdfunding, the outstanding amount of which increased by 24 billion dirhams between 2018 and 2023, or barely 10% of the variation in volume of the overall outstanding credits on the same period,” said the same source.
“In terms of commissions, this level of premiums should barely generate revenues of nearly 26 million dirhams for insurance companies,” we read.
Unlike conventional insurance, the provisions relating to the Takaful insurance contract exclude any notion linked to the prescription of rights, thus allowing participants and beneficiaries to claim their due at any time. This situation should lead to the recognition of a relatively high level of provisioning to deal with undeclared claims, thus reducing the technical surplus of the accounts (net provisions for claims payable of 2.1 million dirhams in the first half of the year). 2023).
“Thus, it would seem that the success of this activity is dependent on the expansion of the offer to other branches such as automobiles and health, which could boost this market and improve its profitability,” we read. That being said, a diversification of the products offered, particularly at the level of compulsory insurance, could be accompanied by a risk of cannibalization between Islamic insurance and conventional insurance.
For its part, Takaful investment (savings), which currently represents only 5% of total premiums, could also contribute to the growth of this market. However, its development remains hampered by an incomplete participatory ecosystem, particularly in terms of the capital market (stock market, Sukuks and investment funds).
Morality: the issuance of Sukuks (sovereign and private) seems necessary today in order to allow Takaful insurance companies to respond, in terms of investment policy of fund contributions, to the “Shariatic constraint” of compliance in the opinion of the Superior Council of Ulemas.
The first and only sovereign Sukuk issue in Morocco took place in October 2018. This involved an amount of 1 billion dirhams amortizable over a period of 5 years for an annual yield of 2.6%.
By Lamia El Ouali
02/07/2024 at 9:07 p.m.
2024-02-07 21:32:04
#Takaful #insurance #limits #system
