This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 7/14/2019

Overview

Despite the general lack of public interest in purchasing insurance policies, however, a full range of products is available and some are mandated by law.  Twenty-two insurance companies operate in the Tunisian market, 15 of which handle a full range of insurance products.  The rest offer a partial menu of insurance products; for example, life, export, and credit insurance, and reinsurance.  Two are subscriber-based mutual insurance companies, three are Islamic “Takaful” (i.e., co-operative system of reimbursement in case of loss) insurance companies, and one is an agriculture mutual fund that offers crop insurance.  Private corporations dominate, with a market share of 60% in 2017; state-owned enterprises and mutual companies controlled about 30% and 10% of the market, respectively.

Compulsory auto liability insurance is rigorously enforced, and virtually all motorists carry these policies, resulting in market saturation for vehicle liability coverage.  In addition, lenders require relevant property, fire, casualty, and life insurance policies at least equal to the amount of the collateralized lien. Tunisians often purchase insurance policies only to obtain bank loans.  To expand the insurance market beyond products mandated by law is a challenge for all market entrants.  

According to the Tunisian Federation of Insurance Companies, gross insurance premiums including vehicle policies were about $863 million or 2.2% of Tunisia’s GDP in 2017; this is a level considered low by the insurance industry and inadequate for proper insurance coverage of the population.  Total premiums increased by 12.5% in 2017, however.  The GOT’s reform efforts to enhance the insurance market have focused on improvement of the financial health of insurance companies, updating of the country’s legal and regulatory framework, development of market segments such as life insurance and crop insurance, upgrading of insurance companies, and opening the sector to greater competition.

The insurance sector’s most important regulatory institution is the General Insurance Committee within the Ministry of Finance.  The Committee is charged with protection of policy-holder rights and oversight of insurance and reinsurance companies.  Other pertinent institutions include the Central Office of Rates (Bureau Central des Tarifications - BCT), which fixes rates for liability insurance premiums on vehicles; the Tunisian Federation of Insurance Companies, which is the trade association for the entire insurance and reinsurance sector; and the Unified Office for Tunisian Automobile (Bureau Unifié Automobile Tunisien), which is the trade association specifically for vehicular liability insurance providers.

There are no foreign-equity share restrictions, and foreign companies may operate freely in the Tunisian insurance sector.  Entrants into the market can establish a commercial presence by establishing a subsidiary (either wholly or partially owned), forming a new company, or acquiring an already established insurance supplier.  To be registered in the country, foreign insurers must receive approval from the General Insurance Committee within the Ministry of Finance.  Once approved, foreign insurance suppliers can compete for insurance lines and will be treated no less favorably than domestic services suppliers with respect to capital, solvency, reserve, tax, and other financial requirements.

Similar to elsewhere in the region, Tunisia does not possess a deep tradition of insurance coverage.  This is especially true for life insurance.  Low domestic savings rates and cultural factors, such as the reliance on the extended family network in case of death or disability and property damage, contribute to a lack of coverage in most insurance segments.

Opportunities

Tunisia’s commitments under the WTO and EU Association agreements have led to a liberalization of the country’s insurance sector.  For U.S. companies intending to invest in Tunisia, this sector may present opportunities, especially in non-life insurance market segments. 

As an alternative to conventional insurance, Zitouna Takaful, El Amana Takaful, and Al Takafulia – which rely on the Islamic “takaful” insurance system of co-operative reimbursement in case of loss – were created to service the Islamic market.  Foreign companies considering insurance operations in the region should examine this new product.

Among the general population there remains limited awareness of life insurance and its benefits.  The financial services sector does not yet offer personal financial planning to assist customers in the design of an appropriate insurance plan.  Both these areas should be considered for their long-term potential.

Web Resources

Tunisian Federation of Insurance Companies (FTUSA)
National Statistics Institute (INS)


 

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