Browse the complete Report on : Mexico Insurance Report Q4 2010
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Writing in July 2010, we have been able to ensure that the report includes actual data for 2009. Data from Mexico’s insurance regulator, the Comisión Nacional de Seguros y Fianzas (CNSF), shows that total premiums in 2009 amounted to MXN232.90bn. This included non-life premiums of MXN138.23bn and life premiums of MXN94.67bn. We envisage that, in 2014, the corresponding figures will be MXN339.60bn, MXN212.17bn and MXN127.43bn. Our forecasts are driven by an increase in non-life penetration from 1.17% of GDP in 2009 to 1.50% in 2014. We are looking for life density to rise from US$65 per capita to US$110 per capita.
BMI’s Insurance Business Environment Rating for Mexico is 64.5 out of 100.
This quarter, we include a discussion of developments within regional markets, on the basis of results published by major cross-border companies in relation to Q209 or Q309 and the latest information provided by regulators and/or trade associations.
Mexico’s Insurance Sector
Mexico’s insurance sector appears underdeveloped by many metrics. In 2008, for instance, total premiums were about one-fifth of the size of those in Brazil, even though Mexico’s economy is only about one-third smaller and the population is only 45% smaller. This appears unlikely to change anytime soon. Many Mexicans who can afford to use financial services, provided by banks or insurance companies, are willing and able to work with providers in the US.
Partly because of the reconstruction of the banking industry following the financial crisis in the mid- 1990s, the life sector is dominated by major foreign groups, but is sufficiently fragmented to allow substantial competition. According to the CNSF, the five largest players in the life segment accounted for 71% of premiums written in H109. US insurance company MetLife was the largest, with a market share of 31%. It was followed by BBVA/Bancomer (15%), Monterrey New York Life (9%), Mexican group Grupo Nacional Provincial (GNP) (9%) and Citi/Banamex (7%).
The non-life segment is more fragmented. According to the CNSF, the five largest players accounted for 54% of premiums. AXA’s operations in Mexico, enlarged by the purchase of ING Seguros in early 2008, were the largest foreign non-life insurer, with a market share of 13%. Spain’s MAPFRE, with a market share of 5%, was the only other foreign group in the top five. Other leaders included the Mexican groups Quálitas (6%), GNP (12%) and Inbursa (18%).
In other words, premium growth has almost certainly been constrained by competition. Compared to their peers in other major Latin American countries such as Brazil or Chile, Mexican insurers have – at least potentially – been more directly exposed to the problems of the US economy in the wake of the global financial crisis.
Nevertheless, numbers from the CNSF indicate that H109 was far from disastrous for Mexican insurers. Total premiums for the period were MXN12.04bn, which suggests real growth of 8.8% year-on-year (y-oy). We expect total premiums of MXN232.30bn for 2009 as a whole. Virtually all of H109’s growth was generated by property (not autos) insurance. Compared to H108, premiums for credit insurance, earthquake cover, and marine, aviation and transport (MAT) rose by 20-25% in real terms. Fire insurance premiums surged 222% in real terms. The life sector, by contrast, saw real growth of 3.5%.
Among the various lines whose results are quantified by the CNSF, a conspicuous underperformer was auto insurance, for which premiums fell 9.4% in real terms in H109. This was a challenge for Quálitas, which in its semi-annual report reported lower sales by financial institutions, lower policy fees and a slump in premiums relating to motorcycles because of the in-sourcing of business by a major client. Losses and claims and acquisition costs fell as well, so Quálitas’ investment income held up despite the volatility of global markets.
Across the industry, the technical result for H109 was, in real terms, only 4.9% y-o-y lower, at MXN3.17bn. Claims rose 13.5%, to MXN57.67bn, but this was substantially offset by lower transfers to reserves. Thanks to the recovery in financial markets, investment earnings rose by more than 14% in real terms to MXN16.09bn. As a result, overall profits were also up in real terms, by 16.6% to MXN8.54bn. For the year ending June 30 2009 total assets of the insurance sector rose by 12% in real terms to MXN572.87bn.
Issues To Watch
Growth Of Life Segment
Life insurance premiums are growing significantly more slowly than they were in 2006-2007. Given the
competitive pressures in the segment, and the economic challenges still facing Mexico, we expect the segment to stagnate from 2011.
Fire Insurance And Other Non-Life Insurance Lines (Other Than Autos Insurance) The CNSF’s H109 figures highlight that the non-life sector has been boosted by particular lines. We suspect that the surge in fire insurance and other lines will not be sustained. Nevertheless, we forecast double-digit growth in the non-life segment over 2011-2012.
Mexican Fixed Income Markets
At a time when premiums generally are slowing, the continued favourable performance of the local bond markets will be crucial.
About Us
ReportsandReports comprises an online library of 10,000 reports, in-depth market research studies of over 5000 micro markets, and 25 industry specific websites. Our client list boasts almost all well-known publishers of such reports across the globe. We as a third-party reseller of market research reports employ a number of marketing tools, such as press releases, email-marketing and effective search-engine optimization techniques to drive revenues for our clients. We also provide 24/7 online and offline support service to our customers.
Contact:
Ms. Sunita
7557 Rambler road,
Suite 727, Dallas, TX 75231
Tel: +1-888-989-8004
http://reportsandreports.blogspot.com/
http://reportsandreports.proarticles.co.uk/
http://reportsnreports.wordpress.com/
Browse All Business Monitor International Market Research Reports
Writing in July 2010, we have been able to ensure that the report includes actual data for 2009. Data from Mexico’s insurance regulator, the Comisión Nacional de Seguros y Fianzas (CNSF), shows that total premiums in 2009 amounted to MXN232.90bn. This included non-life premiums of MXN138.23bn and life premiums of MXN94.67bn. We envisage that, in 2014, the corresponding figures will be MXN339.60bn, MXN212.17bn and MXN127.43bn. Our forecasts are driven by an increase in non-life penetration from 1.17% of GDP in 2009 to 1.50% in 2014. We are looking for life density to rise from US$65 per capita to US$110 per capita.
BMI’s Insurance Business Environment Rating for Mexico is 64.5 out of 100.
This quarter, we include a discussion of developments within regional markets, on the basis of results published by major cross-border companies in relation to Q209 or Q309 and the latest information provided by regulators and/or trade associations.
Mexico’s Insurance Sector
Mexico’s insurance sector appears underdeveloped by many metrics. In 2008, for instance, total premiums were about one-fifth of the size of those in Brazil, even though Mexico’s economy is only about one-third smaller and the population is only 45% smaller. This appears unlikely to change anytime soon. Many Mexicans who can afford to use financial services, provided by banks or insurance companies, are willing and able to work with providers in the US.
Partly because of the reconstruction of the banking industry following the financial crisis in the mid- 1990s, the life sector is dominated by major foreign groups, but is sufficiently fragmented to allow substantial competition. According to the CNSF, the five largest players in the life segment accounted for 71% of premiums written in H109. US insurance company MetLife was the largest, with a market share of 31%. It was followed by BBVA/Bancomer (15%), Monterrey New York Life (9%), Mexican group Grupo Nacional Provincial (GNP) (9%) and Citi/Banamex (7%).
The non-life segment is more fragmented. According to the CNSF, the five largest players accounted for 54% of premiums. AXA’s operations in Mexico, enlarged by the purchase of ING Seguros in early 2008, were the largest foreign non-life insurer, with a market share of 13%. Spain’s MAPFRE, with a market share of 5%, was the only other foreign group in the top five. Other leaders included the Mexican groups Quálitas (6%), GNP (12%) and Inbursa (18%).
In other words, premium growth has almost certainly been constrained by competition. Compared to their peers in other major Latin American countries such as Brazil or Chile, Mexican insurers have – at least potentially – been more directly exposed to the problems of the US economy in the wake of the global financial crisis.
Nevertheless, numbers from the CNSF indicate that H109 was far from disastrous for Mexican insurers. Total premiums for the period were MXN12.04bn, which suggests real growth of 8.8% year-on-year (y-oy). We expect total premiums of MXN232.30bn for 2009 as a whole. Virtually all of H109’s growth was generated by property (not autos) insurance. Compared to H108, premiums for credit insurance, earthquake cover, and marine, aviation and transport (MAT) rose by 20-25% in real terms. Fire insurance premiums surged 222% in real terms. The life sector, by contrast, saw real growth of 3.5%.
Among the various lines whose results are quantified by the CNSF, a conspicuous underperformer was auto insurance, for which premiums fell 9.4% in real terms in H109. This was a challenge for Quálitas, which in its semi-annual report reported lower sales by financial institutions, lower policy fees and a slump in premiums relating to motorcycles because of the in-sourcing of business by a major client. Losses and claims and acquisition costs fell as well, so Quálitas’ investment income held up despite the volatility of global markets.
Across the industry, the technical result for H109 was, in real terms, only 4.9% y-o-y lower, at MXN3.17bn. Claims rose 13.5%, to MXN57.67bn, but this was substantially offset by lower transfers to reserves. Thanks to the recovery in financial markets, investment earnings rose by more than 14% in real terms to MXN16.09bn. As a result, overall profits were also up in real terms, by 16.6% to MXN8.54bn. For the year ending June 30 2009 total assets of the insurance sector rose by 12% in real terms to MXN572.87bn.
Issues To Watch
Growth Of Life Segment
Life insurance premiums are growing significantly more slowly than they were in 2006-2007. Given the
competitive pressures in the segment, and the economic challenges still facing Mexico, we expect the segment to stagnate from 2011.
Fire Insurance And Other Non-Life Insurance Lines (Other Than Autos Insurance) The CNSF’s H109 figures highlight that the non-life sector has been boosted by particular lines. We suspect that the surge in fire insurance and other lines will not be sustained. Nevertheless, we forecast double-digit growth in the non-life segment over 2011-2012.
Mexican Fixed Income Markets
At a time when premiums generally are slowing, the continued favourable performance of the local bond markets will be crucial.
About Us
ReportsandReports comprises an online library of 10,000 reports, in-depth market research studies of over 5000 micro markets, and 25 industry specific websites. Our client list boasts almost all well-known publishers of such reports across the globe. We as a third-party reseller of market research reports employ a number of marketing tools, such as press releases, email-marketing and effective search-engine optimization techniques to drive revenues for our clients. We also provide 24/7 online and offline support service to our customers.
Contact:
Ms. Sunita
7557 Rambler road,
Suite 727, Dallas, TX 75231
Tel: +1-888-989-8004
http://reportsandreports.blogspot.com/
http://reportsandreports.proarticles.co.uk/
http://reportsnreports.wordpress.com/
