Updated
Biz Brief: Morocco Scores High in Africa’s Insurance Market; Morocco Energy to Light Up Africa; GE Senior Official Talks about Morocco; and Moroccan Logistics Company Expands Its Reach – Jean R. AbiNader
Jean R. AbiNader, MATIC
October 18, 2017
Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center
Morocco’s insurance sector expands. In terms of overall performance in Africa, Moroccan companies take second in the volume of premiums issues. Nationally, Wafa Assurance is first in terms of market share.
According to the latest report from Morocco’s Insurance and Social Insurance Supervisory Authority, a Moroccan, in 2016, spent an average of $102.30 a year for insurance, which breaks down into $41.90 for life insurance, and $60.40 for non-life insurance products (car, illness, credit, etc.).
Wafa Assurance has a 21% share of the Moroccan market, followed by Moroccan Royal Insurance at 16.8%, Moroccan Saham at 12.8%, and the French provider Axa at 11.2%. A new entrant, Attamine Chaabi scored high in life insurance with 19.2%, rising from 15th to 5th place in one year.
Wafa, a company of Attijariwafa Bank, placed first in life insurance products (28.3% market share) and second, after Saham, for non-life products. Wafa is also well established in Tunisia, where it has 18% of the market, and has strong operations in Senegal, Cameroon, and Côte d’Ivoire. Worldwide, Morocco, at $3.47 billion in premiums, ranks 49th, behind the UAE and Saudi Arabia in the MENA region; South Africa leads the continent with $42 billion in premiums.
Reflecting the agricultural downturn in 2016, liability claims in 2016 related to crop insurance were up some $84 million, fire and natural causes rose to $19 million, and auto related payouts reached $702 million.
Despite progress, Africa is still in a power deficit, so Morocco’s national energy strategy includes garnering continental and European customers. From its development of extensive solar technology at very low output costs, to environmental and security benefits of controlling production, Morocco has a winning hand for reaching new markets throughout the region.
As an article in Quartz Africa points out, “Even though the continent’s power generating capacity has slowly improved over the years, rationing, rolling shortages, and blackouts continue to hamper many countries’ development — including economic giants like South Africa and Nigeria.”
In addition to poor production, and despite the best intentions of the Power Africa project launched under President Obama, financing for power generation remains intermittent and problematic. “African governments invest about $12 billion a year in the power sector, even though it needs an estimated $33 billion in 2015. By 2040 the African power sector will need $63 billion annually.” The lack of investment, poor power access, high prices, and weak reliability cost African economies an average of 2.1% of GDP.
While this is the case in sub-Saharan Africa, North Africa is investing tens of billions of dollars in renewable energy projects. Solar power projects in Tunisia, Egypt, and Morocco are clearly aimed at satisfying domestic demand and meeting energy targets in Europe, which is reducing the use of nuclear and hydrocarbon energy sources.
A pioneer in building public-private partnerships (PPP) for renewable energy projects, “Morocco has emerged as a global exemplar of going green, banning plastic bags and setting up ambitious goals to crack down on carbon emissions. In 2012, the government also phased out fossil fuel subsidies and shifted its focus to renewables. In 2016, it hosted the United Nations convention on climate change, and also kickstarted a four-year project aimed at using solar panels to generate power, heat water, and provide air-conditioning in hundreds of mosques.”
A GE executive explains why his company is in Morocco for the long term. Anas Kabbaj, Country Executive Morocco, was interviewed by Oxford Business Group (OBG) about his perceptions of doing business, and why Morocco makes sense in GE’s global strategy. He described GE’s extensive involvement in large-scale energy projects with various partners, including the National Office of Electricity and Drinking Water (ONEE), and with private companies such as Nareva, and Royal Air Maroc.
He points out that due to the complexity of large projects, any delays in the timing of financing, logistics, partner participation, and technology inputs can lead to delays that affect the overall project. For example, when GE experiences customs delays, it impacts activities throughout the implementation targets. So, in order for Morocco to become an international logistics hub, it must invest heavily in upgrading its facilities and performance to international standards.
He noted the excellent performance of ONEE and MASEN in using the PPP model to develop capital-intensive energy projects, which are now being coordinated by a single department under MASEN. Kabbaj also said that PPPs represented a viable business model in the healthcare sector, where private expertise and investment are critical.
SJL attracts investment to expand its logistics transport between Europe and Africa. The Moroccan company SJL has found a new partner, AfricInvest, to invest in its five-year expansion plans. AfricInvest specializes in private equity in the African and European markets. This partnership will enable SJL to tap into the Public-Private Investment Fund (SME Growth) to generate new clients and facilities in Africa through both organic growth and acquisitions.
Both partners see benefits to their growth strategies. SJL will continue to build recognition of its expansion in current and future markets while AfricInvest, which currently operates in 25 countries, will continue to expand its network of clients.