MAGHREBIA Life Insurance thinks bigger

MAGHREBIA VIE, belonging to the MAGHREBIA group, is a joint stock company established in 2009. Its purpose is life insurance and financial protection of clients.

The company offers insurance services to individuals, professionals and corporates through Provident and Savings products. Its share capital amounts to 20,000,000 TND at the end of 2021 and is 72% owned by ”Assurances Maghrebia”.
At the end of 2021, the company achieved a turnover of 93.2mTnd Mtnd corresponding to a market share of 12.7%.

Reasons for the IPO:

  • Further strengthen its capital to cope with new regulations (solvency, IFRS, etc.);
  • Raise funds to finance its internal growth (digital and innovation projects, etc.);
  • Expand internationally through equity stakes in insurance companies established in high-potential markets;
  • Take advantage of the tax advantage by opening up at least 30% of the capital (reduction of the IS rate for 5 years).

Development between 2019/2021
At the end of 2021, Maghrebia Vie’s revenue (issued and accepted premiums) amounted to 93.16 MTnd, i.e. an average annual growth rate in the period 2019-2021 of 16% against a growth of 12.5% ​​for the entire life insurance sector in Tunisia. Maghrébia Vie’s market share thus reached 12.7% (against 12.4% in 2020), placing it in second place after Attijari Assurances (18.4%).

Development of turnover (issued and accepted premiums) in MDt

This growth was achieved through a network of 80 insurance agencies, 37 brokers, 8 direct offices and 108 life insurance producers distributed throughout Tunisia.

The analysis of the premium structure shows a predominance of the savings activity, which represents 71% of the insurance company’s income against 29% of the provision activity.

Premium structure

In parallel with the growth in revenue, claims expenses recorded an average annual growth of +39% to 35,866 MTnd at the end of 2021 due to the pandemic and the increase in redemptions in light of the country’s economic situation.

At the end of 2021, Maghrebia Vie’s technical activity as a whole had a technical net result of 13.6 MTnd against 8.5 MTnd in 2019, i.e. an average growth rate of +26%. The technical margin (technical result/premiums) then goes from 12.6% in 2019 to 14.6% in 2021.

1. measured in net income
With invested assets of 440.3 MTnd (consisting mainly of fixed income monetary investments), Maghrebia Vie had a coverage ratio of technical provisions on investments of 108% at the end of 2021, exceeding the regulatory minimum threshold of 100% and representing a sign of certainty for the insured. By the end of 2021, these investments generated financial results of 4 MTnd, bringing the company’s net result to 12.6 MTnd, i.e. a ROE (Return on equity) of 17.3% (compared to 13.88% in 2019).

Development of net income and ROE

A clearly comfortable solvency margin
In continuous improvement, the insurer’s solvency margin stood at 293% at the end of 2021 (almost 3 times the regulatory margin) against 274% in 2020 and 273% in 2019.
This gives Maghrebia Vie room to develop the business or position itself on even more profitable products/markets.

Based on the business plan spanning the period 2022-2026, the insurer’s revenue (issued and accepted premiums) should grow at a CAGR of 11.5% (to 160.85 MTnd by the end of 2026).

In addition, the management estimates a slowdown in the rate of collection of premiums in 2022 to only 8.8% (i.e. a turnover of 101.4 million td).

Similarly, requirements should develop at a CAGR of 14%, rising from 32.9 MTnd in 2021 to 64.3 MTnd in 2026. The loss rate will then increase from 35% at the end of 2021 to 40% on the horizon. Business plan. At the same time, investment income should grow by +15.26% in the period (to 63.3mTnd by the end of 2026). At the end of 2022, the company’s management expects a technical result of 11,378 MTnd, a decrease of 20% compared to 2021. The technical result is expected to resume an upward trend from 2023, i.e. an average growth of +10% to reach 21.5 MTnd by the end of 2026.

Along the same lines, the net profit will follow an increasing curve (a CAGR of 16%). The management expects that a net result of 12.6 Mt in 2022 will be increased to 26.2 Mt at the BP horizon.

With this boost, the reinsurance company’s equity will exceed DKK 165.6 million. Tnd, a level that will enable it to consolidate its solvency, coverage of provisions and strengthen its financial base.

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