Shareholding relations between banks and insurance companies in Algeria: an overview

Abstract

Purpose. This study aims to analyze the overlap of shareholding between banks and insurance companies in Algeria, whose commercial activities are not necessarily the same, but functional complementarities exist. The method used in this paper is an inventory of cases where a financial institution is a shareholder of another, following several reforms applied to this market since the 1990s.
 Results. Regarding the shareholding matrices between financial institutions in Algeria, it was found that the intervention of the public sector is the most dominant, unlike the private and foreign sector. The study also showed that the behavior of banks and insurance companies in terms of capital participation is mainly linked to the legal measures introduced in Algeria after the opening of the banking and insurance market to private and foreign operators, essentially aimed at the development of the country. As well as the economic interest of complementarity, since bank financing is usually provided by an insurance guarantee, in addition to the introduction of bancassurance, which allows marketing of insurance products through the cash desks of banks.
 Scientific novelty. The literature review has shown that the subject of shareholder relations between financial institutions refers to a new perspective of the market vision, the core of which is the bank. The analysis is carried out from the perspective of building an updated picture of the capital structure of these financial institutions in Algeria.
 Practical value. The development of shareholding matrices between banks and insurance companies in Algeria, helps to understand the nature of the functional complementarity between these financial institutions, and also explains their strategic behavior with respect to the market.