Inclusive insurance in Morocco: The findings of DID’s study

July 18, 2019

Développement international Desjardins (DID) was mandated to conduct a nationwide study of the insurance market in Morocco and make recommendations for the development of inclusive insurance. The study describes the current insurance situation in the country and identifies opportunities to make insurance more inclusive there. 

 The insurance market in Morocco

 Although Morocco has the highest rate of insurance coverage in North Africa, it’s still quite modest. Approximately 24% of Moroccan adults have at least one insurance product. That percentage drops drastically to only 13% in poor populations and 11% in rural areas.

 The main reasons given by people for not taking out insurance are lack of money, distrust of insurance companies and religious or cultural beliefs. Insurers are seen in a negative light because of the frustratingly slow claims settlement process.

 Regulatory barriers

 Morocco’s current legal framework focuses primarily on traditional insurance and isn’t specifically geared at making insurance more inclusive. Only a small number of insurers target lower- and modest-income market segments.

 DID’s analysis of the legal framework identified certain obstacles to the development of inclusive insurance. These include the obligation to meet with clients in person when they buy insurance, the fact that suppliers aren’t sufficiently familiar with the national territory, the lengthy process for contract approval, a cumbersome enrolment process and the complexity of contracts.

 Inclusive insurance: In significant demand

 DID’s study shows that inclusive insurance is in demand in Morocco, particularly in the following 8 groups: unemployed people, people between 18 and 25, people 65 and over, homemakers, modest income households, people working in the informal economy, people in rural communities and very small businesses. In total, these groups make up about 80% of Morocco’s population.

 These groups have varied insurance needs: life and health insurance, work accident coverage, insurance at retirement, cashflow variability and asset protection for businesses, weather insurance for farmers, etc.

 Promoting inclusive insurance in Morocco

 This market study, combined with Combining a market study and affordable insurance products and the right technological system, should promote the emergence of inclusive insurance in Morocco.

 The study identified 2 success factors that would make micro-insurance part of the solution to inclusion.

  • Start by focusing on simple products that are the most likely to succeed.
  • Create efficient packages that combine the types of coverages needed by the target groups with less risky, cost-efficient coverages.