18 May 2015 Insurance

Cuban insurance growth slow despite US relations thaw

Opportunities for insurers in Cuba remain limited despite some domestic reform and improved diplomatic relations with the US.

This is according to Axco Insurance Information Services’ latest country report on Cuba, which explained that there is little understanding of insurance in Cuban society as the state makes provision for all aspects of life.

In addition, the Cuban non-life insurance market is traditional and underdeveloped, with just two state-owned companies offering a range of relatively basic products.

The government has stated an intention to promote insurance and has taken action in the agricultural sector, but Axco believes that this is unlikely to produce results until the population is more able to pay for it.

Tim Yeates, managing director at Axco, said: “With little or no insurance culture and a difficult business environment, the opportunities for insurers in Cuba are limited.

“Political and economic changes have so far done little more than allow a few individuals to operate as self-employed; no significant new businesses have been created and, despite the government's declared intention to promote insurance, an increased demand is  yet to been seen.

“The passing of the Foreign Investment Law and a thaw in relations with the United States suggest that, with time, the Cuban market will eventually open up. However, it does not look like this will happen in the short-medium term.”

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