The Latin American insurance market grows 11.5 % in 2021

The Latin American insurance market grew 11.5 % in 2021, to 149,794 million dollars (about 153,280 million euros), and recovered from the strong contraction it experienced in 2020 (-11.9 %). Although it has not yet recovered the level of premiums prior to the outbreak of the pandemic, according to the report ‘The Latin American insurance market in 2021’, prepared by Mapfre Economics and edited by Mapfre Foundation.

The growth of this market is due to the economic recovery and the interest rate environment in the last months of the year, which favors life insurance. In addition, the economic effect on the volume of insurance business due to the depreciation of currencies against the dollar was moderate and even some markets, such as Mexico or Chile, were favored by an appreciation of the average exchange rate of their respective currencies, Mapfre explained.

Premiums in the life insurance segment in Latin America, which represent 42.5 % of total premiums in 2021, experienced an increase of 11.2 % measured in dollars, while premiums in the non-life insurance segment grew 11.7 %.

The life insurance segment only partially recovered from the sharp drop in the previous year, which was largely due to the behavior of Brazil and Chile, which failed to reach the level of premiums prior to the health crisis. The rest of the markets, except for Venezuela, exceeded the pre-pandemic level.

Life insurance premiums increased

Within the life business, the growth of individual and group life insurance premiums stood out, representing 36.9 % of total premiums in the region, with growth of 8.7 % compared to the previous year. For its part, previsional and pension insurance experienced significant growth of 30 %, although its weight is relatively small in the life business of the region, representing 5.8 % of total premiums in 2021.

On the other hand, the non-life insurance segment of the Latin American market exceeded the level of premiums prior to the crisis caused by the pandemic. According to the report, this sector had already been anticipating the situation of economic stagnation in which the Latin American economy found itself and has once again been compensated by the health business, with growth in premiums in 2021 of 11 % (9.2 % in 2020).

In terms of structure, the insurance markets in Latin America that presented the highest levels of concentration were Uruguay, Costa Rica and Nicaragua, with a Herfindahl index above the threshold that indicates a high industrial concentration.

On the contrary, Peru, Venezuela, Honduras, Puerto Rico, Panama, the Dominican Republic, El Salvador and Guatemala presented values ​​with a moderate level of concentration and the rest of the Latin American insurance markets presented indices below the threshold that anticipates moderate levels of concentration.

Click the link to subscribe for free to our news and media group on Telegram: https://t.me/G_ELSUMARIO_News

Source: dpa