Latin American Insurance And Reinsurance 2009 Recap: Beyond The Usual Suspects--Growth In Unexpected Places

Author:Mr M. Millett
Profession:Edwards Angell Palmer & Dodge LLP

In the last year, the overall Latin American insurance market has continued to experience robust growth, estimated at 7.4% by Fundacion Mapfre for the first half of 2009 over the first half of 2008. Based upon the first half of 2009, total premiums for the region for the full year 2009 will likely have exceeded US$ 100 billion (72 billion Euros). The Latin American non-life sector grew 13.2% half year over half year to 23.7 billion Euros, paced by growth in the health, fire and workers' compensation lines. Auto insurance premiums grew by only .7% for the same period, while life insurance premiums were down 2.4%.

As to specific jurisdictions, we have continued to see moderate to high growth in several of the larger, more established insurance markets in Latin America (Brazil, Venezuela, Mexico), as well as some stagnation and even contraction (Argentina, Chile). However, we have also witnessed robust growth rates and renewed interest in many of the smaller markets that are not typically the focus of discussions about Latin American insurance. Peru in particular has shown impressive growth rates and economic stability, while even unusual suspects such as Ecuador, Uruguay, Bolivia and the Central American nations have performed remarkably well.

The Major Markets -- Brazil, Mexico, Venezuela, Argentina, Chile

Given their generally greater connection to the global economy, it should come as little surprise that the more-developed Latin American insurance markets had more mixed results than those seen in some of the more isolated countries. While the Venezuelan insurance market boomed based upon previously untapped potential, petroleum risks and a quickly growing consumer middle class, Brazil's and Mexico's markets continued to grow even as they were held back by overall economic stagnation. In Chile and Argentina, however, the markets could not overcome the downward tow of their local economies, with stagnation and even contraction in both jurisdictions in 2009.


Brazil remains by far Latin America's largest insurance market, with nearly 40% of the region's total premiums.

The country experienced slowed growth early in 2009, with even some contraction in certain month to month comparisons. Given early results, Brazil's insurance regulator, the Superintendencia de Seguros Privados (SUSEP), predicted in May that growth would slow to only 4.9% for the year. Results picked up again later in the year however, leaving total gross written premiums for the first 11 months of 2008 up nearly 13%.

For the month of August 2009, reported that total premiums for the Brazilian insurance market were R$ 6.39 billion (US$ 3.68 billion), up 14.94% month over month when compared to August 2008. Total premiums for the year through August 31, 2009 reached a total of R$ 48.35 billion (R$ 27.85 billion), up 9.6% over the same period in 2008. When comparing September 2009 to September 2008, however, total premiums in the Brazilian insurance market were down 4.81% (US$ 1.42 billion), down from US$ 29.58 billion to US$ 28.16 billion. For the same period total premiums were up 13.99% for pension and 5.4% for credit and guaranty, but down for accident and health (-5.3%), life (-6.89%), auto (-9.09%), non-auto liability (-12.42%) and mandatory auto (-54.86%). For the period, the most significant lines of business in Brazil were pension (40.5%), auto (21.86%), non-auto liability (15.11%) and life (13.72%). Gross written premiums for November 2009 were up 30.4% over November 2008, totaling US$ 6.85 billion for the month. Total gross written premiums for the first 11 months of 2009 totaled US$ 39 billion, up nearly 13% over the first 11 months of 2008. Perhaps wary of again under-predicting potential growth, Susep predicted in December 2009 that the Brazilian insurance market will grow an additional 16-20% in 2010.


Premium growth reports consistently placed Venezuela among the fastest growing markets in Latin America in 2009, generally ranging between 20 and 40% annual growth.

Comparing February 2009 to February 2008, total premiums for the Venezuelan insurance market increased 20.77% from US$ 1.460 billion to US$ 1.763 billion. Ceded premiums increased 76.01% by the same comparison. For the first five months of 2009, total premiums for the country totaled more than 11 billion bolivares, a 38% increase over the same period in 2008. Total premiums for the Venezuelan market reportedly grew by 44% when comparing December 2009 to 2008. The lines with the greatest growth were pensions (300%), credit and guaranty (64.4%), life (48.7%) and auto (20.6%). Mexico

Despite continuing economic and social upheaval, total premiums in the market continued to grow, if at z more moderate rate than that seen in previous years.

Mexico's insurance regulator, la Comision Nacional de Seguros y Fianzas, reported that the total premiums for the market increased 8.8% when comparing the first two quarters of 2009 to the first two quarters of 2008. Liability insurance premiums reportedly grew by 17.8% and life insurance premiums reportedly grew by 3.5%. Total premiums grew 3.8% in the third quarter of 2009. The increase was led by growth in the life (10.9% growth) and accident and health (1,1% growth) lines, and tempered by a 4.5% decline...

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