MAPFRE Highlights 19.3% 2010 Latin American Insurance Market Growth

By | February 14, 2012

A report from the FUNDACIÓN MAPFRE, which analyzed 19 Latin American countries, concludes that the Latin American insurance market “achieved in 2010 a 19.3 percent rise in premium volumes compared to the preceding year, reaching €91.370 billion [$120.15 billion], confirming the “sector’s expansion cycle started seven years ago.”

The report points out that all of the markets, except for Venezuela, achieved “nominal increases” in their premium volumes in 2010. However, four countries achieved significant growth: Brazil -39.4 percent; Peru – 42.0 percent; Chile 36.6 percent and Uruguay -35.1 percent. The report also noted that the growth figures were somewhat affected by the “appreciation of most local currencies against the euro, in particular the Brazilian Real and the Colombian Peso.”

The eight largest insurance markets accumulated 95.1 percent of premiums and the three largest markets 67.1 percent. Brazil, with a 42.5 percent share, is still the largest market in the region. Its premiums exceed those of the next two countries, Mexico and Puerto Rico, combined.

“Puerto Rico – where Health insurance for low-income population is managed by the private insurance sector and paid by the Government – still records the highest premium per capita in the region, with €1,958 [$2574] per inhabitant, and was again noteworthy in 2010 with regard to the penetration of the insurance sector in the economy, understood as the percentage of premiums over the Gross Domestic Product (GDP), amounting to 16.5 percent.”

In contrast Chile’s premium per capita in 2010 was €363 [$477] per inhabitant [4 percent of GDP); Brazil’s was €270 [$355] per inhabitant (3.4 percent of GDP) and Venezuela with €226 [$350] per inhabitant (3.6 percent of GDP. The comparable figures for Europe are €1,403 [$1845] per inhabitant (7.5 percent of GDP) and the U.S. with €2,851 [$3749] per inhabitant (8 percent of GDP).

MAPFRE’s report shows that 60 percent of the premiums achieved in 2010 in these markets correspond to the Non-Life segment (€54.774 billion) [$72 billion], which grew 11.4 percent. The major boost in 2010 came from the Life Assurance line, which grew 33.6 percent, compared to the previous year, and achieved €36.597 billion [$48 billion] in all of the countries.

In a “preview for the first half of 2011” the report shows the continued strengthening of most of the insurance sectors in Latin America. The figures analyzed reflect that the industry achieved a premium volume of €50.414 billion [$66.3 billion] overall, an 18.1 percent increase, compared to the same period of 2010.

The report also points out that in the first half of 2011, “last year’s trend reversed and the Non-Life line recorded a larger growth (18.9 percent) than the Life Assurance line (16.8 percent).

“The report underscores the main corporate operations carried out in the first half of the year, among which the memorandum of understanding between Zurich and Grupo Santander for the establishment of a strategic alliance to distribute insurance products, as well as the most relevant legislative changes in the region should be highlighted.”

In an overall view of the Latin American reinsurance market MAPFRE analyzed data reflecting its development between 2006 and 2010. The figures show that the “overall cession percentage for the Latin American countries and insurance lines stood at 12 percent in the period.” In 2010, the total volume of ceded premiums amounted to US$14.053 billion (€10.660 billion). Nearly 50 percent of that total corresponded to the property damage segment, which includes fires and earthquakes.

The report in English and Spanish is available at FUNDACIÓN MAPFRE’s website, in the section corresponding to the Institute of Insurance Sciences – Studies Centre (Instituto de Ciencias del Seguro – Centro de Estudios).


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