Protection gap the main talking point at FIDES 2017
The insurance penetration in Latin America and how it could be increased will be the main talking point at the FIDES 2017 insurance conference in El Salvador, according to a survey carried out by Intelligent Insurer.
Of all survey respondents, 46.7% believe that insurance penetration will be the main topic at FIDES.
Recent natural catastrophes such as earthquakes in Mexico showed again that a large share of assets at risk remain unprotected.
Anticipated industry insured losses from an M7.1 earthquake that struck central Mexico on September 19 are not likely to exceed $1.2 billion. This compares to overall economic losses of between $4 billion and $8 billion, according to catastrophe modelling firm AIR Worldwide. Insurance penetration rates across Mexico are particularly low in residential lines.
James Kench, regional director portfolio management at JLT Latin America, noted that recent nat cat events will be discussed as well as their effect on capacity and rates.
Market participants expect significant rate increases in property re/insurance, particularly in regions affected by the events.
Juan-Fernando Serrano, CEO of LatinoInsurance, added that the delegates may want to find out more about how the recent events in Mexico, the Caribbean and US will affect reinsurance costs.
Of all respondents, 26.7% said that new risks will be the main talking point, including discussions about potential challenges and opportunities they present.
Another 20% believe that the changing regulatory environment in some countries will be the focus at FIDES, while 6.7% think economic growth forecasts in key economies in Latin America will be a hot topic.
According to the survey, the biggest challenge the re/insurance industry in Latin America currently faces is the continuing soft market for many lines of business. Of all respondents, 62.5% believe that this is currently the industry’s main concern.
“The market is in transition and how that will impact companies across the region will be important,” said David Encinas, managing director at Guy Carpenter.
Furthermore, 12.5% of respondents see regulation and protectionist policies in some countries as the biggest challenge and concern. At the same time, 12.5% of survey participants suggested that they have no concerns at all in the current operating environment in Latin America and believe that business is good at the moment.
Another 6.25% cited political instability in some parts of the region as their main concern.
Steven Bazil of The Bazil Group, said: “The collapse of the Venezuelan economy has impacted the reinsurance sector. Rapid devaluation of the bolivar is making conducting business in Venezuela extremely challenging.”
Some 6% of respondents cited uncertainty over economic growth in key economies as their main concern.
When asked about the main reason to attend the FIDES conference, the majority, 56% said that it was to meet new people and seek new clients.
Another major reason given by 25% of respondents was to negotiate with clients in relation to future deals.
For 12% of respondents the main reason to attend FIDES is to reaffirm relationships with existing clients in a relaxed environment, while others see the conference as an opportunity to learn from the expert speakers and sessions.
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