News Column

Fitch: Room for Growth for Reinsurers in an Underinsured Latin America

September 2, 2014



SANTIAGO, Chile--(BUSINESS WIRE)-- Link to Fitch Ratings' Report: Latin American Reinsurance (Diversity and Growth Opportunities in an Improved Regulatory Environment)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=764888

The Latin American reinsurance market remains shaped by foreigner reinsurers, while the bulk of Latin entities that have begun an incipient development mainly focus in captive niche segments, according to a new Fitch Ratings report.

Gross written premiums (GWP) and the reinsurance business in Latin America have attractive growth projections, aligned with the strong growth rates during the previous years. Most Latin American countries have shown an economic profile enhancement and a solid development of its financial industry, which benefit the insurance penetration and underwriting sophistication. GWP breakdown continue to show an ample dispersion by country, and it's concentrated in retention lines as auto insurance, health and traditional life.

In the special report published today, Fitch says the Latin American reinsurance market is in a soft cycle considering that in the last couple of years the number of natural disaster has decreased from its peak in 2010 and 2011. As a result, there is an international surplus of reinsurance capacity, weaker reinsurance premiums rates and lower funding cost.

The number of Latin reinsurers remains limited (fewer than 15), as a consequence of the ample capital requirements for reinsurance business, geographical ability to disperse the risk, and higher sovereign risk of most of the host countries. However, in recent years there has been further development of Latin reinsurers, mainly in Brazil, Colombia and Panama, focusing on captive reinsurance programs and niche approach through strong relationship with related insurance entities.

The report 'Diversity and Growth Opportunities in an Improved Regulatory Environment' is available at www.fitchratings.com, or by clicking in the link above.

Additional information is available at 'www.fitchratings.com'.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Santiago Recalde

Associate Director

+56 (2) 2499 3327

Fitch Chile Clasificadora de Riesgo Ltda.

Alcantara 200, Of. 202, Las Condes

Santiago, Chile

or

Rodrigo Salas

Senior Director

+56 (2) 2499 3309

or

Eduardo Recinos

Senior Director

+503 2516 6606

or

Media Relations

Elizabeth Fogerty, +1-212-908-0526

elizabeth.fogerty@fitchratings.com


Source: Fitch Ratings


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