(MENAFNEditorial)
Structurally high inflation in Argentina has severely restricted the development of individual life insurance and will likely continue to do so through the forecast period. However it has provided an environment in which the non-life insurers have been able to pass on increased claims (and other) costs on to their clients. In the meantime group life insurance sales have been rising strongly as employers have seen life cover as a valuable benefit with which to attract and retain key staff. These trends will likely persist through the forecast period with the result that premiums rise steadily in both USD and real terms. However in the short term the likely weakness in the ARS will constrain growth in USD terms.
Like its counterparts in Iran and Venezuela Argentina's insurance sector is shaped by the structurally high level of inflation. This affects the two main segments in very different ways. In the non-life segment the effect is to boost claims costs and to complicate estimations of future costs. However the insurers have been able in the two main sub-sectors (motor vehicle insurance and workers compensation insurance or ART) at least to pass on the costs to their customers.
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This has meant that non-life premiums have risen in real and USD terms and should continue to do so. New rules which came into force at the end of June 2015 will increase the upfront costs of non-life insurers which are making underwriting losses (as most are). However the higher reserves can be amortised over two years. Moody's Investor Services believes that the new rules will strengthen the non-life insurers financially.
Conversely the high rate of inflation has caused individual life insurance to remain at an embryonic level of development. Individuals are understandably reluctant to enter into long-term contracts. Argentines with savings prefer to hold real estate or (offshore) bank deposits or other assets that provide some protection against domestic...
The Argentina Insurance Report has been researched at source and features BMI Research's independent assessment and forecasts for the insurance sector. It examines industry developments key growth drivers and risk management projections including the macroeconomic situation government policy regulatory environment and the level of development and potential for growth broken down by line. Leading insurers are profiled covering premiums products and services and competitive positioning.
BMI's Argentina Insurance Report provides professionals consultancies government departments regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Argentinian insurance industry.
Key Benefits
* Benchmark BMI's independent insurance industry forecasts for Argentina to test other views - a key input for successful budgeting and strategic business planning in Argentina's insurance market.
* Target business opportunities and risks in Argentina through our reviews of latest industry trends regulatory changes and major deals investments and macroeconomic developments.
* Exploit latest competitive intelligence on your competitors partners and clients via our Company Profiles (inc. SWOTs KPIs and latest activity).
Coverage
BMI Industry View
Summary of BMI’s key industry forecasts and views covering the Life and Non-Life segments the evolving competitive landscape and business operational risks.
Industry SWOT Analysis
Analysis of the major Strengths Weaknesses Opportunities and Threats within the insurance sector and within the broader political economic and business environment.
BMI Industry Forecasts
Historic data series (2005-2014) and forecasts to end-2019 for key industry indicators supported by explicit assumptions plus analysis of key risks to the main forecasts. Indicators include:
* Life/non-life Premiums: Total premium growth (USDmn) premium growth (% y-o-y) penetration (% of GDP) density (USD per capita) for Life and Non-Life sectors claims reinsurance and assets and liabilities.
* Non-life subsectors: Data on gross written premiums for all major Non-Life segments (motor transport property personal accident health general liability and credit financial).
BMI’s Insurance Risk Reward Index
BMI’s Risk Reward Indices provide investors (Life and Non-Life) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry economic and demographic data points to provide an indices of highest to lowest appeal to investors with each position explained.
Company Profiles*
Examines the competitive positioning and short- to medium-term business strategies of key industry players. The latest financial and operating statistics and key company developments are also incorporated within the company profiles enabling a full evaluation of recent company performance and future growth prospects.
Growth Drivers & Risk Management Projections
Key data and forecasts to end-2019 focusing on the growth drivers and downside risks to specific insurance lines including:
* Population: Male/female by age group active/pensionable/youth population % of total urban/rural population % of total.
* Freight: Tonnage – air freight rail freight road freight inland waterway.
* Motor: Fleet size by type of vehicle % change y-o-y.
* Epidemiology: Disease Adjusted Life Years and private health expenditure.
Market Overview & Rankings
Illustration of the insurance industry via rankings tables comparing gross written premiums by company (USDmn) and market share (%) for the top 20 players in both Life and Non-Life. This chapter also includes in-depth regional analysis of the market position business strategies and investment potential of the leading insurance companies.
Sources
The insurance Reports draw on an extensive network of primary sources such as multilateral organisations government departments industry associations chambers and company reports.
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