Insurance of agricultural risks in Tunisia
After the country’s independence in 1956, the Caisse Tunisienne d’Assurances Mutuelles Agricoles (CTAMA) was set up, taking over the activities of the existent agricultural mutual companies operating under the protectorate.
Due to farmland severances, agricultural insurance remained marginal. The sector is structured around family farms that do not resort to insurance to cover their lands and productions. Insurance penetration rate has consequently remained very poor.
Agricultural insurance in Tunisia: main indicators
Tunisia listed 516 000 farmers in 2016. Only 40 000 of them have an insurance cover, that is, a little less than 8% of the total number of farmers.
Agricultural insurance reported a turnover of 6.4 million TND (2.6 million USD) in 2017. This class of business accounted for just 0.31% of the total insurance premium volume in 2017.
Related article: | Tunisia, the agricultural sector in the face of natural disasters
Agricultural insurance in figures
Figures in millions| 2014 | 2015 | 2016 | 2017 | 2014/2017 evolution (1) | |||||
|---|---|---|---|---|---|---|---|---|---|
| In TND (1) | In USD | In TND (1) | In USD | In TND (1) | In USD | In TND (1) | In USD | ||
Written premiums | 7 526 | 4 050 | 5 666 | 2 803 | 5 590 | 2 439 | 6 396 | 2 612 | -15% |
Management expenses | 2 627 | 1 414 | 1 429 | 707 | 2 402 | 1 048 | 3 162 | 1 291 | +20% |
Management expenses ratio | 34.91% | 25.23% | 47.37% | 49.44% | - | ||||
Earned premiums | 7 181 | 3 864 | 5 545 | 2 743 | 5 913 | 2 580 | 5 878 | 2 400 | -18% |
Incurred losses | 4 744 | 2 553 | 1 549 | 766 | 2 475 | 1 080 | 2 509 | 1 024 | -47% |
Loss ratio | 66.06% | 27.94% | 41.86% | 42.68% | - | ||||
Combined ratio | 100.97% | 53.17% | 89.23% | 92.12% | - | ||||
(1) Growth rate in local currency
Three companies are dominating the Tunisia agricultural insurance market: CTAMA which controls more than 50% of the written premiums, followed by Astree (16.44%) and Comar (12.63%).
Agricultural insurance in Tunisia: Agricultural damage compensation fund
Given farmers’ lack of interest in agricultural insurance and in view of the scale of damage they have been sustaining, the authorities established a compensation fund designed for the agricultural damage caused by natural disasters.
This decision resulted in the promulgation of Law number 2017-66, dated December 18, 2017, followed by three enforcement decrees.
Related article: | Establishment of a fund to prevent natural catastrophes in Tunisia
The fund’s area of expertise and resources
The compensation fund, as defined by the legislator, covers only damage caused by floods, storms, wind, droughts, frost and snow, risks that result in compensation only if the claim:
- is not covered by an insurance policy sold on the market,
- is due to climate change,
- is of exceptional intensity,
- is inevitable and irrepressible,
- triggers heavy material losses.
The fund has been designed to provide farmers and fishermen, members of the program, with a compensation mechanism for agricultural damage. The activities concerned are the irrigated and rained crops, livestock farming, agricultural production and fishing.
The fund is financed by:
- a State subsidy up to 30 million TND (12.2 million USD) per year.
- an annual contribution by the farmers, members of the fund, of 2.5% of the value of insured production or expenses incurred.
- a solidarity tax of 1% withheld on a list of products such as fruit, vegetables, cereals, collected by the department of cereals, olives and fisheries.
Compensation provided by the fund
A compensation threshold of 60% of the product value or of the production costs is set. This compensation calculated on the basis of the level of the loss experience applies only to farmers having underwritten a policy with the insurance company in charge of the fund management.
In order to gain membership in the Fund, it is necessary to underwrite an insurance contract for a minimum period of three years, renewable.
The state of natural disaster requires the publication of a governmental decree that defines the affected areas, determines the activity affected and sets the period of time during which the disaster struck.
Read also | Natural disasters in 2018
