MEXICO CITY--(BUSINESS WIRE)--
An increasing volume of shareholder dividends is the main driver behind
a reduction in the overall capitalization of Mexico’s insurance
industry, according to a new Best’s Special Report.
The report, titled "Dividends Affecting Capitalization Levels in
Mexico’s Insurance Market," is based on an A.M. Best
analysis of Mexico’s 103 insurance companies, with the exception of nine
pension and annuity companies that held a 5% market share as of March
2014. The results showed a negative trend in terms of capitalization for
the industry over the past five years. Even though the competitive
environment has pressured underwriting results, and the low interest
rate environment has negatively affected the industry’s revenues, the
industry’s profitability remains strong and fairly stable for respective
market segments. As a result, the industry’s profitability is not
considered a driver for the deterioration in capitalization.
The analysis was done in advance of Mexico’s insurance sector moving
toward a new Solvency II-type regulatory scheme, which will be
implemented in April 2015. “The new regulatory capitalization
requirements, while challenging, should not pose a threat to any of the
current participants,” said Alfonso Novelo, director of analysis for
A.M. Best AmÉrica Latina, S.A. de C.V. However, Novelo noted that there
might be room for merger and acquisition activity, especially in the
case of companies that are concentrated by line of business.
For the full, complimentary copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=227621.
To watch a video interview with Alfonso Novelo, please visit: http://www.ambest.com/v.asp?v=fmmexico814.
This report originally appeared in Best's Journal, dated August 4, 2014.
Best's Journal is a biweekly publication that presents A.M. Best's
original research, analysis and commentary on the global insurance
industry, and is available exclusively as part of a subscription to the
Best's Insurance News & Analysis service. More information about the
Best's Insurance News & Analysis subscription service is available at www.ambest.com/sales/bina/default.asp.
To order, contact Customer Service at +(1) (908) 439 2200, ext. 5742 or
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Copyright © 2014 by A.M. Best Company, Inc.ALL RIGHTS
A.M. Best Company
Eli Sanchez, 52 55 5436-0236
Novelo, 52 55 5436-0164
Director of Analysis
Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
Peavy, 908-439-2200, ext. 5644
Assistant Vice President,
Source: A.M. Best Company