(MENAFN Press) The Tunisian insurance industry is small, but with huge potential for growth. There were only 19 insurers operating in the country's insurance industry in 2011.
The global financial crisis paralyzed the Tunisian economy, which had a negative effect on the insurance industry during the review period.
The Tunisian revolution of 2011, which was a result of political imbalance supported by high unemployment and corruption, also impacted the insurance industry.
Rising unemployment did not encourage Tunisians to invest in insurance products, and insurance penetration in Tunisia stood at 1.76% 2011, which is very low comparing with developed countries.
The implementation of foreign direct investment (FDI) in insurance attracted foreign insurance companies in 2008.
However, the cap of 49% did not allow any company to establish a branch independently, and companies tended to invest in Tunisia through domestic insurers.
However, FDI is set to be implemented in other industries such as call centers, electronics manufacturing, aerospace and aeronautics, automotive parts, and textile manufacturing, which is expected to drive the insurance industry by reducing unemployment and increasing disposable income over the forecast period.
The change in Tunisia's government started to encourage investment in infrastructure development and new employment opportunities, while the rise in construction activity, growth in automobile sales and advanced healthcare services supported the growth of the Tunisian insurance industry during the review period.
New employment opportunities are expected to increase public spending over the forecast period, and the insurance industry is expected to grow at a CAGR of 6.4%.
Savings products drive the life insurance segment
An awareness campaign by the Tunisian government for life insurance products supported growth during the review period. The government's promotion of life insurance as an important vehicle for savings is expected to drive life savings products over the forecast period.
Growing construction industry
The growth of the Tunisian real estate and construction industries supported the growth of property insurance during the review period. The Tunisian government supports private construction companies and encourages them to invest in the country.
Upcoming contracts in the real estate sector are also expected to support property insurance. Projects such as Dubai Holdings' multi-billion dollar developments such as the Maghreb highway, and new airports and industrial zones are expected to support the growth of property insurance in Tunisia over the forecast period.
Popularity of private healthcare
Private healthcare in Tunisia registered growth during the review period, as there was an increase in the number of private health insurance service providers. Increased consumer attention towards technologically advanced healthcare services encouraged them to take out private health insurance.
Motor insurance was the largest category
Motor insurance was the largest category in the Tunisian insurance industry, accounting for 46.5% of the gross written premium in 2011.
This was due the rising road accident rate and mandatory third-party motor liability insurance. As the economy recovers, automobile sales are expected to increase, and supporting the growth of motor insurance over the forecast period.
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