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Follow on Google News | Market Report, "Mexico Insurance Report Q4 2010", publishedRecently published research from Business Monitor International, "Mexico Insurance Report Q4 2010", is now available at Fast Market Research
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 Qualitas (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 Qualitas, 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 Qualitas' 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. For more information or to purchase this report, go to: - http://www.fastmr.com/ About Business Monitor International Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at http://www.fastmr.com/ About Fast Market Research Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156. # # # Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available. End
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