release

The concentration of the insurance sector remained at its average level during the 2021 financial year, according to the 9th annual report on financial stability, published by Bank Al-Maghrib (BAM), the Insurance Control Authority and of social security (ACAPS) and the Moroccan Capital Market Authority (AMMC). “In 2021, the structure of the insurance market in terms of number of operators and market shares remained almost unchanged. Consequently, the concentration of the insurance sector, measured by the Herfindahl-Hirshman (HHI) index, remained at its average level at 0.117 once morest 0.116 a year earlier,” the report said. In Life insurance, concentration has kept its high level with an index that stood at 0.177 (compared to 0.178 in 2020), adds the same source, noting that the reduced number of players active in this segment, combined with an asymmetrical distribution of their market share, continues to explain this finding. On this market animated by only nine players, three of them absorb 66.7% of market share. Within the life branch, the analysis of concentration brings out the same observation. Indeed, all the categories of this branch display high levels of concentration which are more marked for the categories “mixed” and “UC contracts” (units of account), reports MAP. However, a downward trend in the concentration of UC contracts is emerging, driven by the growing interest of players in marketing this type of contract, the report reveals. With an HHI of 0.137, non-life insurance (excluding assistance and credit) maintained an average level of concentration. The number of players on this market remained stable and the shares held by the players did not undergo any significant changes. Compared to 2020, the intra-non-life branch concentration has not changed. The said report indicates that the categories “Automotive”, “General civil liability”, “Fire and natural elements” and “Accidents at work and occupational diseases” show average concentration levels, while the categories “Injury accidents”, “Risks techniques”, “Transport”, surety credit assistance and other non-life operations (hail, livestock mortality, theft, climatic risks) stand out for their high levels of concentration.

Despite a slight improvement observed in the second quarter of 2022 by a little more than half of the companies, the business climate remains unfavorable for more than a third of the industrialists surveyed as part of Bank Al’s quarterly business survey. -Maghrib (BAM).

Said survey specifies that the proportion of companies dissatisfied with the business climate varies from 23% in “agrifood” to almost half in “textiles and leather” and “mechanics and metallurgy”.

According to the Central Bank, 54% of manufacturers surveyed believe that supply conditions would have been “difficult” in the second quarter. On the other hand, 42% maintain that they have been “normal”.

By branch of activity, the results of the survey show that 84% of companies would have indicated “difficult” supply conditions in “electrical and electronics” and in “mechanical and metallurgical”, 45% in ” chemistry and parachemistry”, 43% in “agri-food” and 28% in “textile and leather”.

Bank Al-Maghrib also reports that “the stock of raw materials and semi-finished products would have been at a normal level in all branches of activity”.

Commenting on the evolution of the workforce employed during the last three months, the industrialists confide that they would have experienced stagnation compared to the first quarter of 2022, particularly in the “agrifood”.

It should be noted that more than half (57%) of “mechanical and metallurgy” manufacturers report a reduction in the workforce and 43% stagnation; while in “electrical and electronics”, 65% of companies declare an increase and 26% a stagnation.

BAM also reports that these proportions are respectively 47% and 48% in “textiles and leather” and 20% and 80% in “chemicals and parachemicals”.
Under these conditions, manufacturers say they expect a stagnation in the number of employees employed over the next three months.

According to the results of the survey, the increase in the workforce should concern the “electrical and electronic” and “textile and leather” industries, while the stagnation should affect those of the “chemicals and parachemicals” and ” agro-food”.

If 74% of companies anticipate stagnation in “mechanics and metallurgy”, 24% of manufacturers are convinced that this branch will show a drop in the workforce.

It should be noted that 66% of manufacturers believe that unit production costs would have increased in the second quarter, while 34% maintain that they would have stagnated during this period.

According to Bank Al-Maghrib, by branch, the proportion of manufacturers declaring an increase in these costs was 90% in “electrical and electronics”, 74% in “agrifood”, 70% in “chemistry and parachemistry”, 56% in “textile and leather” and 43% in “mechanics and metallurgy”, can we read in a press release.

With regard to the evolution of the cash position during the same period, 55% of manufacturers believe that it would have been “normal” while 25% of them think, on the contrary, that it would have been ” hard “.

The breakdown by branch shows that these proportions are respectively 83% and 17% in “textiles and leather”, 58% and 33% in “food industry”, 56% and 23% in “chemicals and parachemistry” and 90% and 3% in “electrical and electronics”.

According to the Central Bank, 44% of “mechanical and metallurgical” companies describe, on the other hand, a “easy” cash flow situation and 28% “normal”.

The other lesson to be drawn from this report is that access to bank financing would have been described as “normal” by 82% of companies and “easy” by 11% of them.

Bank Al-Maghrib specifies that these shares are respectively 78% and 18% in “chemicals and parachemicals” and 73% and 16% in “agrifood”.

The public institution notes, on the other hand, that it would have been considered “normal” according to 68% of the “textile and leather” industrialists and “difficult” according to 32% of them; while in ‘mechanical and metallurgical’ and ‘electrical and electronic’, access to bank financing would have been described as ‘normal’ by all companies.

BAM reports, moreover, that “the cost of credit would have been stagnant, according to the majority of manufacturers, and this, in all branches of activity with the exception of “textiles and leather” where half of the companies indicate a rise”.

Finally, the organization reports that investment spending would have stagnated, from one quarter to another, according to 69% of manufacturers and increased by 19%.

According to the same source, by branch, 64% of “chemical and parachemical” companies indicate stagnation and 32% an increase. In the “food industry”, they would have stagnated according to 86% of the bosses and decreased according to 11%.

According to the results of the survey, these shares are respectively 82% and 16% in “mechanics and metallurgy” and 58% and 28% in “textiles and leather”. Conversely, the Central Bank notes that “electrical and electronics” companies indicate an increase in investment spending.

The report concludes that, for the next quarter, “64% of manufacturers anticipate stagnation in investment spending and 33% an increase.”

Alain Bouithy