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Mexico Insurance Report Q1 2013
Business Monitor International, November 2012, Pages: 81
Key Insights And Key Risks
The Mexico Insurance Report considers the prospects for both life and non-life insurers in the country.
Recent developments continue to highlight both strengths and weaknesses. In the non-life segment,
premiums have grown at double-digit rates, in real terms, in most lines other than accident and health,
through H112. Life premiums have also grown at a respectable rate. For many insurers, profitability has improved as a result of tighter control of costs and losses and/or higher prices.
We doubt that there will be radical changes in the life segment unless and until: a) a sustained education programme effectively promotes life insurance and long term savings; b) shifts in the distribution of household incomes mean that there is a dramatic increase in the number of households that can afford to buy the offerings of the life insurance companies; and c) at least one of the major players develops an innovative product that captures the imagination of the masses. The rapid rise in micro-insurance in Brazil over the last 18 months or so provides an indication of what could be achieved.
In some markets, development of insurance is hampered by desperate competition for business –
regardless of profitability – from large numbers of undersized companies. This is emphatically not the case in Mexico. Compared to other emerging markets, both the main segments stand out for the importance of companies that are substantial by most standards and backed by well-capitalised financial institutions.
Various deals in the last year or so highlight how Mexico is still seen as a key opportunity by many multinational players. The first is the formation of the bancassurance joint venture across all of Latin America between Zurich Insurance Group and Santander. This deal takes advantage of three trends:
rising demand for non-life insurance in economies that are developing relatively fast, the growth in organised savings and the further development of bancassurance as a very important distribution channel.
Although Mexico’s life segment remains in competition with its vastly larger counterpart in the US, all three trends are present in the country (Zurich is underwriting non-life risks as well).
A second deal is GrupoSura’s purchase of the pension and asset management business of ING across South America and its life insurance businesses in Peru and Chile. This transaction is unusual in that it produces a regional player that is not a multinational based in North America or Europe. One aspect that has not been emphasised is that ING’s pension operations in Mexico made up a substantial part of the business that was sold.
A third deal, announced in March 2012, is HSBC’s sale of its property and casualty insurance business in Mexico to AXA. This is part of a broader move by HSBC to focus on core activities, and is accompanied by a 10-year bancassurance deal in Mexico and other countries with the French insurer. This deal further increases AXA’s leadership in the non-life segment and in the only country in the region in which AXA has a substantial operation.
Over the last quarter, BMI has made the following changes:
- The analysis incorporates BMI’s latest forecasts for the Mexican economy, including details in relation to auto sales and trends in the healthcare sector.
- Our analysis incorporates a considerable amount of commentary made available by the regulator and the leading insurers in relation to conditions in H112.
Executive Summary 5
Table: Total Premiums, 2010-2017 5
Key Insights And Key Risks 5
SWOT Analysis 7
Mexico Insurance Industry SWOT 7
Mexico Political SWOT 8
Mexico Economic SWOT 8
Mexico Business Environment SWOT 9
Life Sector Overview 10
Latin America Life Sector Overview 10
Table: Latin America Life Premiums, 2010-2017 (US$mn) 10
Mexico’s Life Sector Update 11
Life Insurance Industry Forecast Scenario 13
Table: Life Premiums, 2010-2017 13
Growth Drivers And Risk Management Projections 14
Table: Insurance Key Drivers, Demographics, 2010-2017 14
Non-Life Sector Overview 16
Latin America Non-Life Sector Overview 16
Table: Latin America Non-Life Premiums, 2010-2117 (US$mn) 16
Mexico Non-Life Sector Update 17
Non-Life Industry Forecast Scenario 19
Table: Non-Life Premiums, 2010-2017 19
Growth Drivers And Risk Management Projections 20
Macroeconomic Outlook 20
Table: Mexico – GDP By Expenditure, Current Prices Breakdown, 2008-2016 23
Political Stability Outlook 24
Table: Latin America Security Ratings 26
Table: Insurance Key Drivers, Disability-Adjusted Life Years, 2010-2017 29
Insurance Risk/Reward Ratings 32
Table: Mexico’s Insurance Risk/Reward Ratings 32
Table: Latin America Insurance Risk/Reward Ratings 33
Competitive Landscape 34
Latin America Competitive Landscape 34
Major Players In Mexico’s Insurance Sector 37
Company Profiles 39
AXA Seguros SA de CV 42
Banorte-Generali Banca de Ahorro y Previsión 46
BNP Paribas Cardif 48
Inbursa Seguros 54
MAPFRE América 56
QBE Insurance Group 61
Quálitas Compañía de Seguros SAB de CV 64
Monterrey New York Life 68
Zurich Santander Insurance America 70
Country Snapshot 73
Table: Population By Age Group, 1990-2020 (‘000) 74
Table: Population By Age Group, 1990-2020 (% of total) 75
Table: Key Population Ratios, 1990-2020 76
Table: Rural/Urban Population Split, 1990-2020 76
BMI Methodology 77
Insurance Risk/Reward Ratings 78
Table: Insurance Risk/Reward Ratings Indicators And Rationale 79
Table: Weighting Of Indicators 80
AXA Seguros SA de CV
Banorte-Generali Banca de Ahorro y Previsión
BNP Paribas Cardif
QBE Insurance Group
Quálitas Compañía de Seguros SAB de CV
Monterrey New York Life
Zurich Santander Insurance America