(Ecofin Agency) - As a leading insurance provider in Morocco, Sanlam Maroc still faces challenges in the savings segment while the country’s 3.8% insurance penetration rate suggests significant growth opportunities for insurers.

Sanlam Maroc, Morocco’s leading insurer with a 17% market share, announced (Friday) a 1.2% increase in its cumulative revenue for the first half of 2024, reaching MAD3.535 billion ($362 million) compared to MAD3.493 billion ($357 million) during the same period last year.

This modest growth was primarily driven by the performance of non-life insurance activities, which offset a decline in the savings (life) segment. During the preiod reviewed, the savings segment was challenged by competition from banking products that benefit from higher interest rates. Overall, revenue increased by 6.9% year-on-year, reaching MAD1.389 billion ($142 million), according to the company's statement.

The financial investments made by the company with insurance premiums rose by 1.2%, amounting to MAD16.448 billion at the end of June 2024, up from MAD16.261 billion dirhams in December 2023. This follows a 13% drop in financial results in 2022 due to the poor performance of financial markets, before rebounding with a 15% increase in 2023.

Additionally, net technical provisions increased by 3.2% during the same period, indicating prudent financial management in the face of an uncertain economic environment.

In comparison, in 2023, Sanlam Maroc's overall revenue reached MAD6.153 billion, marking a 3.3% increase from the previous year. This growth was largely driven by non-life insurance activities, which saw a 6.4% rise.

However, the struggling savings segment continues to underperform in 2024, posing a potential challenge for the company, even as it views the expansion of mandatory health insurance (AMO) as a long-term opportunity. For now, the expected benefits have yet to materialize, and the company must now adapt to the demands of complementary health insurance, a transition that will require significant effort.

A subsidiary of South African group Sanlam, the largest insurance group in Africa, Sanlam Maroc remains a key player in Morocco, leading the non-life insurance market, particularly in the automotive and health sectors. Although its planned merger with Allianz did not materialize, the insurer indicated at the end of 2023 that it continues to strengthen its position through strategic partnerships and diversification of its offerings.

In 2022, it rebranded Sanlam Maroc to reflect its affiliation with Sanlam. In Morocco, the insurance penetration rate declined by 0.2 percentage points in 2023, settling at 3.8% compared to 4% the previous year.

Fiacre E. Kakpo