Standing up against the external bank of algeria politics
«I'm upset because we're dealing with practices that are unconstitutional,” he delclared on Al Bilad's private network television show Challenges. Khelifati stated that article 43 of the 2016 Constitution prohibits discrimination, monopoly and unfair competition. “Today, these practices are experienced with the BEA, but also in public tenders where one is excluded for misleading reasons. There are subterfuges to exclude us from competing when competition must be fair. So it is a de facto monopoly that all private Algerians actually experience and endure,” he insisted. We should also recall a series of institutional measures designed to prohibit all these forms of discrimination. In this regard, he will quote the orientations of the President of the Republic and of all successive governments, saying that there is no difference between the public and private sectors. “On the 23rd of December 2017, at the signing of the public-private partnership pact, the Prime Minister explicitly announced it, and on the 23rd of February 2018, the President of the Republic discussed this subject again, as well as in March,” said Alliance Assurance's CEO.
“Well, then why is it still recurring despite all these assurances,” the show's host journalist asked. “It happens all over again because there are some people who do not want private sector development in our country.” As a specific example, he will quote a BEA directive from 2012 “but which is still valid”, he explained angrily. “No later than last week, our customers were told that if they wanted to have a credit, they should not renew their insurance with their traditional insurer,” said Hassan Khelifati indignantly.
Questioned whether there is a notified refusal by the BEA to its customers, Khelifati explained that they received a verbal refusal from the BEA. “And when TSA officials (all about Algeria, editor's note) presented the document to us, we were astonished because it clarified the situation,” he added. “So it's an old document that's still being displayed? “ the show's host asked, recalling that the current Prime Minister had instructed public companies to invest their money in public banks. “It happened in 2004, and it was condemned,” Hassan Khelifati pointed out, adding that the directive had been revoked by another Prime Minister, Abdelaziz Belkhadem in 2007. “But it has continued to be anchored in certain mentalities,” expressed the private insurer with regret.
Public sector monopoly
Hassan Khelifati mentioned a public sector lobby that has control over the economic fundamentals.”We also have this inter-public solidarity, which avoids revealing itself by claiming: we are the public sector, we have a monopoly on this country and this economy and we will not let anyone disturb us on our territory”, he analysed.
Asked whether this policy was developed by the bank's senior management or from higher offices, Khelifati considered that the BEA's senior management may not be aware of the existence of this document, which is old and does not think it could have come from higher offices either. “I think it comes from much more personal behavior because the official discourse is obvious,” he explained. And to quote, as an indication, a call for tenders launched recently by Sonatrach to say that even if it was not won by the private-sector, everyone was in the competition, in order to state: “We can accept to be eliminated following technical or other evaluations but not because of our legal status as private companies since we have the same rights. One has to know when to stop because such behavior affects the national economy, competition and national development.”
Hassan Khelifati explained that this document is “very vicious”. According to him, this text creates groups in the classification of companies. “Public insurance companies and one foreign company, AXXA for instance, have unlimited capacity while Algerian private companies and other foreign companies are classified in the second group,” Khelifati revealed. The BEA thus encourages customers applying for credit to withdraw from private insurance and approach the public in order to obtain the requested loan.
Questioned about the criteria used to establish this rating scale, Khelifati is absolutely categorical: “There is no logic. The private sector was not involved in this decision,” he said. He recalled that throughout the world it is not social capital that determines an insurance company's ability to cover but its technical, managerial, insurance treaty and reinsurance capacity and it is what makes a company capable or incapable of acting. “In recent years, we have handled major claims with diligence and reimbursed them with due care, thereby proving our technical, managerial, financial and reassurance capacity”, to respond to the BEA's requirements.
A 10% loss of income for Alliance Assurance
Khelifati said that there are no statistics but if he took his company as a reference, 10% of revenues are lost during the renewal period because of discriminating specifications with fallacious and unacceptable criteria. He will cite examples of this discrimination: to be 30 years old to submit a proposal to such a market or to have 10 billion dinars while no company has this amount.
The CEO of Alliance Assurance deplored the fact that today the Competition Council does not function properly in Algeria, thereby expressing his disappointment at the treatment given to his request on this subject. “The competition council is used for other sectors but not in the insurance sector because it does not have the means to apply the law. For the time being, I don't believe in it anymore,” he sadly conceded.
“Do private banks make any discrimination against public insurers?”, asked the animator.”Of course they do! AXXA has many more privileges than other insurers. Moreover, some private banks also practice discrimination even if we do not yet have proof, but they will be denounced with equal vehemence,” he promised.
The BEA has not officially reacted to these accusations, “except for an informal reaction within the bank's management staff who say that it will work in clarity and within the institutional framework without promising the settlement of this disagreement”, specifying that “discrimination also exists among other banks. This kind of practice is recurrent but we are not going to give up, we are committed to enforce the law and defend our rights and say that the Algerian private sector has the right to develop and that no one has the right to take the national economy hostage.”
Khelifati said that his interest in the private insurance sector “can be summed up in two words: many managers in insurance companies are public employees working for international groups, while I have built Alliance Insurance stone by stone and if it collapses I have to quit.”