Takaful, the other asset of the Moroccan insurance market

Takaful insurance passed an important milestone in 2021, with the publication of the rest of the regulatory corpus related to this type of insurance and the granting of approvals to the first Takaful operators. The entry into force of this new activity, long awaited by the participatory finance community (banks and customers), completes the ecosystem by offering an appropriate insurance offer.

According to a recent report by statista, the total value of Takaful assets in 2018 was around USD 46 billion with a total of 335 Takaful operators worldwide after reaching USD 48 billion in 2016.

According to a recent report by Thomson Reuters, the global takaful industry has seen significant growth potential over the past two decades with double-digit growth (20% CAGR).

The sector is expected to reach USD 86 billion in 2022, compared to USD 31 billion in 2012, which testifies to the significant development opportunities offered by this sector.

At the start of this activity in Morocco, the offer proposed focused mainly on death/invalidity insurance and multi-risk building insurance, to meet a clear demand from participating banks.

It has mainly been the case with savings insurance products known as “Takaful investment”.

→ Read also: The operationalization of Takaful insurance will develop other participatory products

51 Takaful contracts presented after start-up

After the granting by ACAPS of the first Takaful approvals (in December 2021 and January 2022) and the publication on February 7, 2022 of the instruction relating to the presentation of Takaful insurance operations, the activity started on wheel caps. Thus, several models gave rise to 51 Takaful contracts drawn up by the participatory banks. Received by ACAPS, these contracts “respect the reference models but include the specificities linked to each establishment”, explains ACAPS. Furthermore, Takaful insurance has introduced new concepts in Morocco. First is the Takaful Insurance Fund. It is constituted by the EART (Entreprise d’Assurances et de Réassurance Takaful), having legal personality and financial autonomy, and consists of separate accounts established in accordance with the rules provided for in the management regulations of this fund, recalls Le Matin .

Another new concept is the Takaful insurance account, created within a Takaful insurance fund. It is constituted by the contributions of the participants in the Takaful insurance operation and by all the income of this account, including that resulting from the investment of its balance. It is responsible for the payment of sums and indemnities due under insurance contracts and the payment of related costs, as well as the constitution of provisions and reserves.

Significance in the financial market

The emergence of this activity constitutes a real opportunity for financial inclusion by making it possible to integrate populations who do not have recourse to conventional insurance for religious convictions or for ethical reasons.

In doing so, it will contribute to improving the insurance penetration rate and fostering the dynamics of the Moroccan insurance market.

The development of this emerging market remains, however, dependent on the establishment of a participatory finance ecosystem promoting the availability of a wide range of assets in accordance with the opinions of the Superior Council of Ulema (CSO).

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