The Tunisian financial services and insurance sectors, serving a population of just over 11 million, are relatively underdeveloped considering the general diversification and sophistication of the Tunisian economy. A highly fragmented, conservative banking culture has both shielded the banking and insurance sectors from severe losses during the global financial crisis, and prevented them from profiting as much as possible in times of economic growth.
Additionally, rising domestic security concerns and a current tourism sector crisis and a slow economic recovery in Europe continue to negatively impact the sector, resulting in GDP growth of just 0.8% in 2015. Due to these factors GDP growth is expected to remain subdued in the near-term, with estimated growth averaging 2.4% annually through 2018.
Tunisia's insurance sector remains highly fragmented and is comprised of around 23 local firms, 13 of which are diversified insurance firms, while the rest are boutique firms offering limited products. The state mandates that insurers have initial capital of US$ 6.6 mn and that brokers have initial capital of US$ 660 mn. Foreign investors are permitted to accumulate up to 49.5% ownership stake in locally licensed firms operating in Tunisia.
Despite comparatively low penetration levels, overall insurance premiums have been growing steadily in recent years, boosted by rapid expansion within the life insurance segment, along emerging segments as such as sharia compliant takaful and micro-insurance. Insurance premiums grew at a compound annual growth rate (CAGR) of 9% between 2009 and 2014, to reach US$ 801.5 mn.
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