History of the Algerian insurance market

The first signs of insurance activity in Algeria appeared in 1845 when the French company Union Incendie (Fire Union) opened an agency in Algiers. Ever since, other companies started gradually to get established in order to meet the needs of the first settlers.

It is only a century later, beginning from 1950, that the sector started to develop seriously thanks to the introduction of the compulsory workmen’s compensation insurance. In 1958, the compulsory motor insurance came to boost the market’s turnover.

Shortly before 1962, motor insurance became prominent, accounting along with workmen’s compensation plans for 65% of the total premiums. The fire class accounts for only 8% of the overall market premiums, and only simple risks are insured. In 1961, industrial risks were insignificant. Due to the importance of the Mutualité Agricole, one of the first actors emerging on the market, miscellaneous accident insurance was then dominated by hail.

Until the country’s independence in 1962, the local market remained totally dependent on the French market. All French and foreign companies established on the Algerian soil were governed by French legislation.

Upon the country’s independence, the Algerian legislator reproduced all the texts in force pending the enactment of new laws. By then, Algeria counted 160 certified insurance companies, half of which were French. The companies’ branches and agencies are mainly established in large urban centers: Algiers, Oran and Constantine.

The 1962-1995 period was marked by three major events: market nationalization, specialization, sector’s opening to private actors.

Nationalization of the Algerian insurance market

CAAR (Compagnie Algérienne d’Assurance et de Réassurance) was established in 1963 with a view to manage the legal cession and develop a direct portfolio. Foreign companies found themselves compelled to cede 10% of their portfolio to CAAR, a move they were not willing to consider. Instead, they decided to suspend their operations in the country. Their stakes were bought back by CAAR and SAA (Société Algérienne d’Assurance), the latter being then a mixed Algerian-Egyptian company established in 1964.

Following the withdrawal of European companies in 1964, CAAR, SAA and STAR (Tunisia) which bought back the portfolio of the Mutuelle Générale Française Accident (MGFA), currently named Mutuelles du Mans, were the sole companies operating there. Two local mutuals, the Caisse Mutuelle Nationale Agricole, (CMNA) and the Mutuelle Générale de l’Education Nationale (MGEN) complete the market.

In 1966, the Algerian authorities nationalized all foreign companies, establishing State monopoly over the insurance business.

In 1975, CCR started operating. Its capital was initially detained on equal shares by CAAR and SAA who were required to cede all their reinsurance to it. CCR, therefore, became the only counterpart dealing with foreign reinsurers.

Specialization of the Algerian insurance market

Following the removal of intermediaries’ networks, general agents and brokers at the beginning of the 1970s, the whole market was made up of state-run companies, endowed with direct underwriting offices and managed by salaried staff.

From 1973 to 1989, the State introduced market specialization. CAAR was entrusted, in the first place, with industrial risks and marine insurance whereas SAA obtained monopoly over personal line risks.

In 1982, marine business was withdrawn from CAAR and entrusted to the Compagnie Algérienne d’Assurance Transport (CAAT), newly established to manage this kind of risks.

In 1982, the Algerian insurance market’s structure was as follows:

• CAAR, specializing in industrial risks,
• SAA, specializing in personal line insurance,
• CAAT, specializing in marine insurance,
• CCR specialized in reinsurance.

In addition to these limited companies, we also find CNMA for agricultural risks and MGEN which continued to manage personal line risks for the benefit of national education staff members.

The opening of the Algerian insurance market to the private sector

In 1989, insurance companies’ specialization was given up. In 1995, a new legal framework was adopted, putting an end to State monopoly over insurance activities. Henceforth, the establishment of private insurance companies became permitted. The Compagnie Internationale d’Assurance et de Réassurance (CIAR) was the first company to benefit from this opening.

Finally, the February 2006 decree came to complete the legislative panorama:

• by imposing a separation of life and non-life activities,
• by introducing bancassurance,
• by authorizing the opening of branches for foreign insurance and reinsurance companies.

On 28 February 2021, a decree published in the official gazette established the provisions and requirements governing the practice of Takaful insurance in Algeria.