The 2011-2015 program contract: state and perspectives of insurance

The contract program also provides for:

• the extension of health coverage. The population will be covered up to 90% by the compulsory health insurance plan (AMO) and up to 50% by the independents’ health insurance plan (AMI). 
• the reduction in the number of victims of road and industrial accidents. These measures are likely to help save 10 000 lives.
• a GDP gain of 6 billion MAD (718 million USD), saved thanks to road safety improvements.
• additional tax revenues of 9 billion MAD (1.078 billion USD) in 2015.

The 2011-2015 program contract, which includes no less than 70 measures, stands as a genuine road map for the entire insurance business. The established system is based on five strategic areas: the expansion of insurance coverage, the improvement of benefits, the financing of the economy, the development and adoption of international standards and the protection of the economy.

The extension of insurance coverage

For an optimal coverage of risks, insurance and reinsurance companies are committed to expand their new products and to develop appropriate coverages, reaching as many people as possible.

Third part liability (TPL)

Under the new provisions, insurance will gradually be made compulsory for: housing TPL, decennial TPL, general and professional TPL. Under the TPL guarantees, the program contract is designed to cover 50% of the urban population in housing and / or comprehensive householders TPL, 70% of the residential and office buildings in decennial TPL and construction all risks, 20% of the risky occupations with professional TPL or professional comprehensive householders and 40% of the establishments serving the public.

Industrial companies will also be required to underwrite third party liability insurance for property and fire risks.

To enforce these measures, the government will have to put in place control procedures and impose sanctions on offenders.

Health Insurance

The new system is designed to improve health insurance coverage by targeting the poorly protected social groups such as the students or private sector employees.

For this class of business, the objective of the program contract is to achieve a coverage rate of 90% for compulsory health insurance (AMO) and 50% for (AMI), health insurance designed for independent crafts.

Industrial accidents

Through the extension of industrial accidents coverage to all socio-professional categories, the program contract is meant to increase by 50% the penetration rate of this class of business protecting, thus, a larger number of employees.

Natural catastrophes

A system of covering natural catastrophes will be quickly established. It will be backed up by the adoption of a bill. These measures are designed to:

• protect a100% of the population by 2015
• securing household and corporate investments

Improving services

The agreement between the operators also pertains to the improvement of the quality of the services allocated to the indemnification beneficiaries. The measures put forth relate to transparency, rating rejected risks, alleviating procedures of claim reports, accelerating the pace of compensation settlements, easing the procedures of compensation of industrial accidents, amicable settlements.

The financing of the economy

Known for its role as an institutional investor and as a saving specialist, insurance is committed to strengthen its participation in the funding of priority social and economic sectors. The government will, in turn, facilitate investment procedures and provide regulatory and fiscal incentives.
These changes will allow to:

• support long-term savings  
• increase the attractiveness of life insurance
• double the sector’s funding capacity to reach 200 billion MAD (23.96 billion USD)
• devote 23 billion MAD (2.75 billion USD) in reserves to support the development of priority sectors: SMEs and SMIs
• stimulate the country’s economy 

The development and adoption of international standards

To increase supply on the domestic market, insurance companies will have to:

• meet the economic needs of both the economic operators and the public
• combine their capacities to set up a mechanism designed to cover risks with huge sums insured

The program contract projects a continued international growth. The insurance business is required to open even more on bearing markets such as Africa and the Middle East. Regional and continental redeployment must allow:

• to invest a portion of authorized assets in foreign establishments
• to increase the premiums written outside Morocco
• the underwriting by the SCR of 400 million MAD (47 million USD) of additional premiums

The progressive adoption of international standards stands as a priority.

The program contract plans to direct the national insurance market toward international solvency standards. Appropriate measures to speed up this process have already been highlighted such as:

• the board of directors’ accountability as regards investment and reinsurance policies
• the establishment of structures for quantification and the management of the company’s internal risks 
• the establishment of an asset-liability management process

Protecting the economy

The insurance business plays a key role in protecting the economy. Its role to cushion economic shocks and secure assets should be strengthened with the enhancement of financial fundamentals. Note that the insurers' investments account for 30% of the assets of the Casablanca stock exchange.