Wafa issues profit warning

Wafa Assurance, the insurance branch of Morrocan bank  Attijariwafa Bank, issued a profit warning on its 2018 results on March 1, 2019.

Its managers expect MAD600 million of net profit.

This is the poorest performance ever recorded by the insurer since 2015, according to a report by Ecofin Agency. According to the Wafa Assurance, this is due to the rise of the claims ratio that rose to MAD350 million thus reducing the earned premiums. Claims ratio was one of the reasons for the decrease by MAD38 million of its net profit despite a seven percent rise in its turnover.

Casablanca stock exchange’s response to this announcement was unfavourable. The firm’s shares dropped 4.07 percent on the exchange, a loss which is the most important this year. The share value for the company at MAD3,651 is the lowest since February 2, 2017.

Claims ratios have been negatively affecting insurance companies’ financial performances since 2017 (at least). The Moroccan insurance supervisory and social security authority recently published a report which stated that the benefits and costs paid by insurers and reinsurers operating in Morocco increased by 8.7 percent between end 2017 end and 2018 end.