The Algerian insurance market is highly dependent on the motor class of business and on public investments. The economic crisis is about to reduce insurance demand considerably. This crisis, partly accounted for by the collapse of oil prices, plays out through the depreciation of local currency, a notable decrease in the imports of brand new vehicles and the freeze of some initially-scheduled projects.
Three years ago, vehicle imports amounted to 450 000 units per year. In 2016, the forecasts refer to a ceiling of 152 000 vehicles. The fall of registrations is coupled with a decline in household purchasing power. The insured are less and less interested in the motor facultative risks.
In parallel to the collapse of oil prices, the decline in the dinar currency has raised the cost of motor material claims by 30 to 40% because of inflationary price of imported spare parts. All of these elements have narrowed growth prospects of the business for 2016, jeopardizing the precarious balance of some insurers.