Car TPL insurance quotes for 2017

Atlas Magazine is updating its survey on the motor insurance tariffs in force in some countries in Africa and the Middle East (1). Already carried out in 2004 and in 2010, this kind of analysis has been designed to track tariff evolution of motor third party liability (TPL) guarantee between 2004 and 2017.

Car insurance: evolution of motor TPL premiums (2004-2017)

CountryMotor third party liability (1)Remarks
1 911281 96427,53 06128Legal tariff
2 5762922 7413342 238227Legal tariff
Tunisia (1)
191140277199282124Legal tariff
86 45216474 964156104 397169Free tariff in principle
though a minimum is required by CIMA Code
Côte d’Ivoire
89 08816978 80816473 415119Free tariff in principle
though a minimum is required by CIMA Code
Tariff per zone of circulation
50 6069665 065135.460 76298Free tariff in principle
though a minimum is required by CIMA Code
Saudi Arabia
37510034993.31120299Free tariff
184 230125150 19510099 48766Free tariff
(1) Study based on the motor third party liability premium for a 7 Horse Power private petrol vehicle, with initial entry into force in 2015.
(2) Study conducted before the 20% increase in Tunisia for TPL car insurance tariff which came into force in 8 May 2017
LC= Local currency
car insurance quotes

During the last fourteen years, the growth of motor TPL premiums in local currency has been varying from one country to another. While in Algeria the tariff remained practically unchanged between 2004 and 2010, it considerably grew in 2017. It is in Saudi Arabia that the most significant increase has been noted. The premium which was set at 349 SAR (93.3 USD) in 2010 rose to 1120 SAR (299 USD) in 2017, that is a 220% growth.

In fact, tariff evolution remains quite nuanced, on an upward trend in Algeria, Senegal, Tunisia, Cameroon and Saudi Arabia while in Lebanon, Côte d’Ivoire and Morocco, it has gone down.

Motor insurance tartiff analysis per country, in local currency

The Maghreb

The car insurance tariffs showed substantial imbalance among the Maghreb countries. In this area where the socio-economic situation is more or less similar, the difference in motor TPL tariffs is huge.

Car TPL insurance quotes in Algeria

From 1911 DZD (28 USD) in 2014, the premium has risen to 3061 DZD (28 USD) in 2017, that is a 60% increase. This growth applies only to the 2010-2017 period, as premiums had stagnated from 2004 to 2010.

Car TPL insurance quotes in Tunisia

While in Algeria TPL premium has risen since 2010, in Tunisia this TPL premium has hardly altered from 2010 to 2017 whereas between 2004 and 2010 it had reported a 45% leap.

Car TPL insurance quotes in Morocco

Morocco is the only Maghreb country which has reported a decrease of its TPL premium during the 2004-2017 period (-13%). From 2576 MAD (292 USD) in 2004, the TPL premium has gone down to 2238 MAD (227 USD) in 2017.

In terms of purchasing power, insurance accounts for just 8% of the average salary of an ordinary Algerian citizen and 17% of his guaranteed minimum salary.
An ordinary Tunisian citizen is required to disburse 35% of his average salary or 79% of the guaranteed minimum in order to acquire a motor third party liability insurance policy. In Morocco, the same premium accounts for 47% of the average monthly salary.
Eventually, a Moroccan citizen would spend approximately six times as much as an Algerian citizen and 1.3 as much as a Tunisian citizen in order to underwrite a motor TPL insurance policy.

CIMA Zone countries: Senegal, Cameroon and Côte d’Ivoire

Despite the existence of a joint regulatory framework and belonging to the same economic unit, disparities between the three countries remain wide.

Car TPL insurance quotes in Senegal

Motor TPL premium grew by 20% between 2004 and 2017. Such progression has been more noted in the course of the 2004-2010 period when it had increased by nearly 29%. In fact, premiums have gone down by 6% since the beginning of the 2010 decade.

Car TPL insurance quotes in Cameroon

Following a 13% decrease during the 2004-2010 period, premiums sustained significant growth between 2010 and 2017 (+39%).

Car TPL insurance quotes in Côte d’Ivoire

In this flagship country of the CIMA Zone, the amount of the motor premium has witnessed steady slide with 89 088 FCFA (169 USD) in 2004, 78 808 FCFA (164 USD) in 2010 and 73 415 FCFA (119 USD) in 2017, that is, an 18% decrease over the entire period.

It is in Senegal that the premiums are the lowest during this period under study. In 2017, the highest premiums are found in Cameroon with 104 397 FCFA (169 USD), compared to 73 415 FCFA (119 USD) for Côte d’Ivoire. In 2017, premium differences are of 42% between Cameroon and Côte d’Ivoire and of 72% between Cameroon and Senegal.

It is worth noting that Senegal and Cameroon have more or less reported the same progression rate of their respective premiums during the 2004-2017 period, that is, 20% for Senegal, compared to 21% for Cameroon.

The premium gap in motor TPL insurance prices of 76% that existed in 2004 between Côte d’Ivoire and Senegal has dwindled down to 21% in 2017. Senegal and Cameroon have maintained the same gap (71%) during the 2004-2017 period.

Côte d’Ivoire’s TPL premium, which was slightly higher than that of Cameroon in 2004 (+3%), has abruptly decreased in 2017, the year when it became 42% less expensive than that of Cameroon.

In terms of purchasing power, a Senegalese citizen would spend 68% of his average monthly salary in order to underwrite a motor TPL insurance policy, an Ivorian would disburse 56% and a Cameroonian would spend 95%. The high cost of the premiums in comparison with the average salary is partly accounted for by the fact that numerous motorists are driving around without any insurance policy. This non-insurance phenomenon is expanding in Sub-Saharan Africa.

Motor TPL loss ratios in Cameroon, Senegal and Côte d’Ivoire: 2007-2015

CameroonLoss ratio(1)33.9%27.2%30.8%21.8%32.1%24.5%18.5%52.4%37.8%
Loading rate(2)51.6%53.1%61.1%55.3%62.9%65.1%56.3%58.3%57%
Combined ratio85.5%80.3%91.9%77.1%95%89.6%74.8%110.7%94.8%
Côte d’IvoireLoss ratio (1)30.2%22.4%32.6%38.7%-3.1%35.6%36%73.4%50.3%
Loading rate (2)56%54.4%63.1%52.1%78.7%59.1%54.7%68.9%63.1%
Combined ratio86.2%76.8%95.7%90.8%75.6%94.7%90.7%142.3%113.3%
SenegalS/P (1)46.9%48.4%27.5%39.1%38.6%35.7%37.8%54%47.8%
Loading rate (2)55.5%44.3%49.6%47%46.9%32.5%47.8%63.6%43.1%
Combined ratio102.4%92.7%77.1%86.1%85.5%68.2%85.6%117.6%90.9%
(1) incurred losses / earned premiums
(2) Commissions + overhead expenses/ written premiums

In Sub-Saharan Africa, premium variations are disconnected from motor loss experience. Figures published by the companies reported loss ratios below international standards. This loss experience is supposed to trigger a premium decrease and not an increase.

In fact, the sub-Saharan motor insurance policy holder is penalized by the high general expenses reported by the companies. These costs are oftentimes higher than loss ratios.

The Middle East

In the Middle East area, the evolution between the two countries of our sample is diametrically opposite.

Car TPL insurance quotes in Saudi Arabia

From 375 SAR (100 USD) in 2004, motor premiums have amounted to 1120 SAR (299 USD) in 2017, a progression of nearly 200%. The Saudi oversight body, the Saudi Arabian Monetary Agency (SAMA) played a key role in the tripling of the premiums. The motor class of business is currently subject of a drastic overhaul plan. The authorities are indeed imposing an actuarial approach in terms of tariffs with a premium readjustment whose main purpose is to annihilate the high motor loss experience characterizing the market.

Car TPL insurance quotes in Lebanon

Unlike Saudi Arabia, Lebanon reported a decline of its motor TPL premium between 2004 and 2017 which have been practically divided into two: 184 230 LBP (125 USD) in 2004 compared to 99 487 LBP (66 USD) in 2017.

Paradoxically, and despite a premium divided into two, the motor loss ratio of the market has been declining for several years: 67.14% in 2009 compared to 56.19% in 2015.

Lebanon, just behind Algeria, is the country of the sample under study where insurance is least onerous. Saudi Arabia is ranking third.

Motor insurance: evolution of car TPL insurance quotes (2004-2017)

To better grasp the incidence of exchange rates on the various currencies, we shall submit two approaches: the first in constant dollars and the second one in current dollars.

The evolution in constant dollars relies on the year 2004 as a baseline reference, considering that the local-dollar currency parity remains the same from 2004 to 2017.

The evolution in current dollars takes into account the local-dollar currency parity by 31 December of every year.

Country2004-2017 evolution (1)2004-2017 evolution(2)2004-2017 evolution(3)Comments
Premium increase in local currency has been totally absorbed by the dinar depreciation against the dollar. Premium growth in local currency from 2004 to 2017 : +60%
Decline of the dinar against the dollar from 2004 to 2017 : - 60%
Premium decrease in local currency has been exacerbated by the depreciation of the dirham against the dollar.
The substantial devaluation of the dinar against the dollar since 2010 (-68%) has caused the premium expressed in constant dollar to fall in 2017
The decline of FCFA against the dollar has practically cancelled premium growth in local currency
Côte d’Ivoire
The decline of FCFA against the dollar has exacerbated the decline of premiums expressed in dollars
Same remark as Cameroon
Saudi Arabia
Saudi currency remained stable against the dollar from 2004 to 2017
The Lebanese pound benefits from constant parity with the dollar
(1) Evolution in local currency
(2) Evolution in constant USD
(3) Evolution in current USD

Motor TPL premiums versus average salary in 2017 (1)

The table hereafter showcases the following:

  • the amount of the premium in relation to the average salary
  • the amount of the premium in relation to the minimum salary
CountryMotor TPL 2017 premiumsAverage salaryPremium/ average salaryMinimum salaryPremium/ minimum salary
3061 DZD39000 DZD8%18000 DZD17%
2238 MAD4800 MAD47%2570 MAD87%
282 TND800 TND35%357 TND79%
104397 FCFA110000 FCFA95%36270 FCFA288%
Côte d’Ivoire
73415 FCFA130000 FCFA56%60000 FCFA122%
60762 FCFA90000 FCFA68%47700 FCFA127%
Saudi Arabia
1120 SAR10000 SAR11%3000 SAR37.3%
66 USD766 USD9%450 USD14.6%
(1)in local currency

Variation of local currencies in relation to the dollar

During the 2004-2017 period, the currencies that have decreased in relation to the dollar are the Tunisian dinar (-67.64%), the Algerian dinar (-60.16%), the CFA franc (-17.17%), the Moroccan dirham (-11.56%). Saudi riyal and the Lebanese pound have remained stable.

1 USD=68.25 DZD71.42 DZD109.72 DZD
1 USD=8.82 MAD8.20 MAD9.84 MAD
1 USD=1.36 TND1.38 TND2.28 TND
1 USD=527.14 FCFA480.53 FCFA617.66 FCFA
Côte d’Ivoire
1 USD=527.14 FCFA480.53 FCFA617.66 FCFA
1 USD=527.14 FCFA480.53 FCFA617.66 FCFA
Saudi Arabia
1 USD=3.74 SAR3.74 SAR3.74 SAR
1 USD=1473.83 LBP1501.95 LBP1507.38 LBP
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