Mexican insurance sector to grow by 6%: Fitch

The Mexican insurance sector is set to grow by around 6 percent this year, according to Fitch Ratings.

This growth will be fuelled by adequate performance in the short and medium term which points to a stable outlook for the Mexican insurance sector in 2016, according to a new Fitch Ratings report.

The firm also said it expects 3.3 percent growth for the Mexican economy as a whole in 2016.

Losses caused by Hurricane Odile and Patricia have been absorbed by the insurance industry through robust catastrophic reserves and adequate reinsurance programs within the sector, according to Fitch.

The rating firm said it also expects combined ratio to increase in 2016, mainly as a result of the new regulatory framework and agricultural damage that has not been registered regarding Hurricane Patricia.

“Fitch expects that companies will adapt to the recent regulatory initiatives,” said the firm.

“During 2015 insurers and surety sector implemented qualitative requirements from the Unique Insurance and Surety Circular and tested for quantitative factors. During 2016, companies will likely implement quantitative elements, which should strengthen equity and reserve levels.”