Insurance

The Company

Alliance Assurances is a joint stock company founded in December 2004 by a consortium of Algerian investors with an initial capital of AD500m (€4.7m); however, the company did not officially begin operations until 2006. In 2007, Alliance Assurances inaugurated a commercial development programme, which led to a 178% increase in revenues from 2006. In the service of this programme, the company launched Algeria Touring Assistance in association with the Touring Club of Algeria.

In 2009 a subsidiary of Alliance Assurances, Orafina, was created with the goal of developing enterprise resource planning and was designed to become an IT services company. Later that year, the parent company’s share capital was increased to AD800m (€7.4m) and then to AD2.21bn (€20.55m) through a public offering in 2010. The year 2010 also saw the launch of the enterprise resource planner Iris, as well as a significant increase in the number of branch offices in the country, to 200.

In 2011 Alliance Assurances was listed on the Algiers Stock Exchange. For a full year thereafter, its public offering was supported by a liquidity contract signed with Crédit Populaire d’Algérie. Also in 2011, the company deployed a strategic plan, the Nouvelle Alliance 2015 (New Alliance 2015). Over the course of the following year, Alliance Assurances established internal corporate governance committees, in addition to formalising its strategic plan for renewed company growth.

In terms of activity, group revenues stood at AD4.15bn (€38.6m) in 2013, increasing 13.5% over 2012. The company’s net profits also increased, rising 57% to reach AD367m (€3.4m) by the end of 2013. The net earnings per share, meanwhile, were AD63 (€0.59) in 2013, an increase over the AD40 (€0.37) seen in 2012. In terms of dividends, Alliance Assurances paid out AD30 (€0.28) per share for the year, equivalent to a 47.41% payout ratio and a 3.78% dividend yield. This was a marked improvement for shareholders compared to 2012, when the company did not pay any dividends.

Group revenues in the first half of 2014 saw 5% year-on-year growth, from AD2.31bn (€21.5m) to AD2.43bn (€22.6m), while the group’s net income fell to AD216m (€2m), a 12% decline from the first half of the previous year. Alliance Assurances’ return on equity, meanwhile, rose to 17% in the first half of 2014, compared to 11% one year earlier.

Development Strategy

The group’s strategic plan, Nouvelle Alliance 2015, was designed and implemented in the wake of the company’s public listing and was launched during an internal meeting of the company in June 2011. The plan is centred on a strong and ambitious customer-oriented approach, with Alliance Assurances working towards becoming the country’s preferred insurer.

Individuals and professionals are the company’s two primary targets, including both liberal professions and small and medium-sized enterprises. The objective is to double revenues by 2017, to AD6.7bn (€62.9m), and triple the number of branch offices. Becoming the preferred Algerian insurer also means making strides in terms of training and simplifying offers to customers, as well as major efforts to increase communication and advertising.

In 2013 Alliance Assurances ranked as the number-two private insurance company in Algeria for the fifth consecutive year. Nevertheless, it needs to rebalance its business mix, as it is dominated by the automobile segment, which is not profitable due to the high claims volume. The company encourages customers to take out additional policies with low claims rates, such as multi-risk home insurance and employment insurance. Increasing the number of branches is also a core element of the development plan, as more agencies will boost revenues, with Oran and Sétif accounting for 22% and 17% of turnover, respectively. The central region remains the largest contributor, with its sales up 10% in 2013.