How does the Mexican Insurance market work? does the Mexican Insurance market work? Javier...
Transcript of How does the Mexican Insurance market work? does the Mexican Insurance market work? Javier...
September 28th, 2015
How does the Mexican Insurance market work?
Javier Rodríguez GómezRe- + Insurance Consultant
1
Mexico: Demography and Economy
Mexico’s population is 122 million inhabitants, in a territory ofaround 2’0 Mio of sq. km.
2Source: INEGI
Mexico: Demography and Economy
Evidently, the income distribution has been a big problem.
In 2010, 62% of mexican families (Income Group D+, D and E)had an Income up to USD 892/month.
Five years after, due to a recent 25% devaluation, the USDincome of the whole population is smaller.
3Source: AMAI / NIELSEN 2010
Mexican Insurance Market Composition
There are 105 companies, fromwhich 88 are associated under AMIS(Asociación Mexicana deInstituciones de Seguros).
The regulatory changes as from 1994(incl. NAFTA) eliminated all operationbarriers for foreign investment. As aresult now a days there are 59foreign insurers with a branchoperating in Mexico.
AssociatedCompanies
88Domestic 29Foreign 59
Specialized 58Multi-line 30
Motor 41Life 47
Personal Accidents
42
P & C 49Pensions 9
Health 14Source: AMIS 4
Mexican Insurance Market Composition
80%
20%
1990
Domestic Foreign
35 %
65 %
2014
Total Premium 2014: USD 26,2 Billion Domestic Companies 35%
Foreign Companies 65%
Source: AMIS 5
6Source: AMIS
Market Share 2014
Source: AMIS7
Premium and Claims 2014 (Non Life w/o Motor)
Source: AMIS 8
Premium and Claims 2014 (Engineering)
Mexico, Brazil & LA: 2011 Written premium / Branch.
Source: Fundación Mapfre, El Mercado Asegurador Latinoamericano, 2010-2011,Instituto de Ciencias del Seguro, December 2011.
37%
24%
17%15% 15%
9%
3%0%
31%26%
36%
47%
40%
53%
69%
58%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Vida Fianzas y Crédito Daños sin Autos Salud Autos Accidentes Pensiones y Accid.Trab.
SOAT
México Brasil
9
Insurance Market Penetration (Premium / GDP)
As from 2002 the Market Penetration has steadily grown up, but…..
until 2014 the market has finally reached 2.05% (USD 26.2 Bio)
10Source: FinanciAmis
Insurance Market Penetration (Premium / GDP)
Source: Sigma, Swiss Re. World Insurance 2014
Mexico is the 15th largest economy worldwide, but is 58th place in terms ofinsurance market penetration.
Mexico has a lower penetration than the Latin America region as a whole.
11
Insurance Market Penetration (Premium / GDP)
Source: Latinoinsurance
0%
1%
2%
3%
4%
5%
6%
7%
8%
PR CHI ARG BRA VEN PAN REG COL ECU SAL URU CR MEX HON PER NIC PAR BOL DOM GUA
7%
4% 4% 4%3%
3% 3%
2% 2% 2% 2% 2% 2% 2%2% 1% 1% 1% 1% 1%
Mexico has a lower penetration than
the Latin America region as a whole.
12
Non Life (w/o Motor) It is estimated an increase in MEX PESOS for 2015, but……. the recent devaluation will reduce the USD Premium in 8.47%
Source: AMIS 13
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
5.000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
4.011
Mill
ions
of d
olla
rs
Premium
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
5.000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
696
4.011
Engineering Non Life (w/o Motors)
Engineering vs Non Life (w/o Motor) … …
14Source: AMIS
Premium
0
500
1.000
1.500
2.000
2.500
3.000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
2.991
1.825 1.830 1.858
2.720
Mill
ions
of d
olla
rs
H. Wilma
Non Life (w/o Motor) ….. …..
15
Claims
Source: AMIS
H. DeanTabasco Flood
H. AlexH. Karl
Mexicali EQTS ManuelTS Ingrid
H. Odile
0
500
1.000
1.500
2.000
2.500
3.000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
2.991
1.825 1.830 1.858
2.720
Mill
ions
of d
olla
rs
Engineering Non Life (w/o Motors)
….. …..
16Source: AMIS
Engineering vs Non Life (w/o Motor)
Claims
H. Wilma
H. DeanTabasco Flood
H. AlexH. Karl
Mexicali EQ
TS ManuelTS Ingrid
H. Odile
Insurance Market Development
17
Insurance Industry StructureDirect Premiums
Market has grown almost every year during the last decade.
18Source: EstadiscAMIS
Insurance Industry StructureMarket Participation
However, marketcomposition byline of businesshas not sufferedmajor changes.
19Source: EstadiscAMIS
Evolution of technical reserves in the Mexican Market
Source: AMIS 20
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
45.000
50.000
55.000
60.000
65.000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
12.480
49.600
3.484
8.389
1.265
2.952
MIL
LIO
NS O
F DO
LLAR
S
Unearned Premium IBNR reserve Prevision reserves
60,941
Market Combined Ratio
21
Overall Combined Ratio
Source: AMIS 22
0,00
25,00
50,00
75,00
100,00
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Coverage Claims costs Administrative costs
100.08 100.0699.75 97.27 100.88 100.98101.17 103.31 94.5893.1098.60
PREMIUM95.31 95.29
Retention Combined Ratio (w/o Life)
Source: AMIS 23
0
25
50
75
100
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
XL Cost Claims costs Administrative costs
100.08 100.0699.75 97.27 100.88 100.98101.17 103.31 94.5893.1098.60 95.31 95.29
0
20
40
60
80
100
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
XL Retained Claims Costs Administrative Costs
Retention Combined Ratio (Non Life w/o Motor)
Source: AMIS 24
112.38 104.79 102.13 102.53 98.30 103.51 104.04 93.79 94.29 93.68 82.11 87.39 89.30
Retention Combined Ratio (Engineering)
Source: AMIS 25
0
20
40
60
80
100
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
XL Retained Claims Costs Administrative Costs
113.49 107.13 100.92 103.81 87.60 92.22 114.72 104.29 89.71 88.71 78.00 81.30 86.93
Reinsurance
26
Non Life Insurance Premiums
Source: FinanciAMIS (IV quarter figures 2005 – 2014) 27
Current figures
0
10.000
20.000
30.000
40.000
50.000
60.000
70.000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Mill
ions
of p
esos
.
Ceded Premium Retained Premium Written Premium
Non Life (Premium and Claims, w/o Motor)
Source: AMIS 28
0
10.000
20.000
30.000
40.000
50.000
60.000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Written Premium Ceded Premium Retained Premium
Ceded Claim Retained Claim Direct Claim
Non Life Ceded Premiums (w/o Motor)
29Source: FinanciAMIS (IV Quarter figures 2005 – 2014)
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Mill
ions
of p
esos
.
Agro Credit Miscelaneous Fire Marine Liability CAT
ThankYou
foryour
attention
30