The insurance sector has managed to double its business volume in ten years. Some 55.9 billion dirhams in premiums were collected in 2023, compared with 26.7 billion dirhams in 2013. This performance was driven by growth in the non-life segment (motor, home, health, liability and travel insurance), which showed a volume of 30.1 billion dirhams last year, maintaining an annual growth rate of 5.8%, slightly higher than the 5.3% average observed over the last ten years.
This long period of growth could, however, be disrupted in the months ahead, as the sector is set to divest a highly profitable business to the National Fund for Social Security (CNSS, Caisse Nationale de Sécurité Sociale), namely health insurance, which accounts for 12.6% of the non-life branch volume, the equivalent of over MAD 3.6 billion in annual sales for insurance companies, and around MAD 357 million in commissions for insurance agents and brokers.
Extended grace period
This shortfall will result from the transfer of policyholders previously covered by private insurance to the compulsory health insurance scheme (AMO). Around 1.6 million beneficiaries will have to be transferred to the CNSS, corresponding to the so-called « 114 » population: employees and pensioners of public and private establishments eligible for AMO, but who were covered by private insurance, mutual or internal funds before the adoption, in 2005, of the Health Coverage Code which introduced the AMO scheme.
Article 114 of this law provides for the continuity of private coverage for employees in this population who are already registered, as well as for employees newly recruited by companies benefiting from the transition period (around 3,038 private companies and 32 public establishments), on a transitional basis and for a renewable period of five years from the date of publication of the regulatory decrees.
Due to delays in the publication of regulatory decrees, the transition period was constantly extended, and the “114” population continued to grow, much to the delight of insurance companies. It wasn’t until King Mohammed VI’s speech in 2020, calling for an acceleration in the extension of social security coverage to all Moroccans, that this project took a decisive turn. Since then, one regulatory text after another has been adopted, making it inevitable that the 1.6 million insured under private insurance will be transferred to the CNSS.
Another round?
« Our business as insurance consultants is in danger. This is going to be a turbulent time for the sector as a whole, for insurance companies, agents and brokers alike. The generalization of AMO will have a considerable impact on professionals who have a significant proportion of their portfolio in health insurance. Some brokers could lose up to 30% of their business overnight« , commented Farid Bensaïd, President of the National Insurers and Brokers Federation (FNACAM, Fédération nationale des agents et courtiers d’assurance au Maroc), at the federation’s 8th annual meeting, held on Thursday June 6 in Casablanca.
Mohamed Hassan Bensalah, President of the National Insurances Federation (FMA, Fédération marocaine des assurances ), pointed out that the switchover would also have an impact on the companies and employees, who would see their contributions increase « by an average of 1% more of the payroll excluding taxes when they switch over to the CNSS« .
At this meeting, which was also attended by CNSS Managing Director Hassan Boubrik and Abderrahim Chaffai, Chairman of the Insurance and Welfare Supervisory Authority (ACAPS, Autorité de contrôle des assurances et de la prévoyance sociale ), insurance professionals sought to curry favor with the authorities and further delay the switchover of the 114 population. The extension of the transition period should enable insurers and brokers to « better prepare themselves« .
« We want the deadline to be as far away as possible, ideally in 2029. This is not just to ask for favors, but to prepare ourselves, adapt and prepare our customers for this change« , insisted Farid Bensaïd. According to the CEO of listed brokerage specialist AFMA, this preparation cannot take place without « knowing the precise date of the switchover of the 114 population and how it will be implemented ».
What about complementary health insurance?
Weakening of the sector, risk of bankruptcies, impact on jobs… the arguments presented on June 6 seem to have difficulty convincing the DG of the CNSS, who defends the acceleration of the changeover while tempering the ardor of insurers.
« We mustn’t give the impression that we’re just buying time at the expense of a major reform »
For Hassan Boubrik, it is essential at this stage to refocus the debate on a broader perspective, by reflecting on the interests of the country as a whole, which converge towards accelerating the switchover of the 114 population to the AMO scheme. After all, this is first and foremost a « solvent » population, capable of paying its contributions to support the effort to extend social coverage to all Moroccans, and thus maintain the scheme’s financial equilibrium.
« From 2005 to today, that’s 19 years. We can’t talk about a changeover that took place unexpectedly, without sufficient preparation time (…) We had less than two years to absorb 20 million people into the AMO; we were under pressure, but we did it. Preparing information systems and communication with affiliates is not something that takes five years.We mustn‘t give the impression that we’re just buying time at the expense of a major reform« , insisted the CNSS boss.
The interests of policyholders come first
To make up for the shortfall in basic health cover, insurers want to focus on supplementary insurance, which still offers untapped potential. According to the latest FNACAM statistics, sales in this segment do not exceed 70 million dirhams for insurance agents and brokers. But here again, industry professionals are asking CNSS for a favor: to give them « room to maneuver« .
In other words, they want to avoid overextending the range of AMO services, so as to maintain interest in complementary health insurance, particularly in the context of the revision of the national reference rate (TNR). The TNR has long been criticized by policyholders for its reimbursement basis, which is out of step with the rates charged by private practitioners and clinics. For example, the 300 dirhams paid for a consultation with a specialist is reimbursed at only 120 dirhams, based on a reference rate of 150 dirhams.
Hassan Boubrik’s response to this request was unequivocal: the interests of policyholders come first. « We’re talking about 1.6 million Article 114 beneficiaries, while on the other hand there are 24 million CNSS policyholders and over 5 million CNOPS policyholders. I can’t ask these people to be badly reimbursed for certain procedures, simply to defend the interests of the profession. This will not be accepted, because it is not in the general interest of our policyholders« , he insists.
He adds: « There will always be a margin for the supplementary health insurance. The CNSS reimburses up to 70%, while insurers can go up to 80%, 90% or even 100% for those who want better coverage. There are also new, innovative procedures that are not yet covered by the AMO, which can be included in the complementary package. »
Written by Safae Hadri, edited in English by S.E.
