Annual Nicaraguan Insurance Sector Report
There was an improvement in accident rates and operating performance in the Nicaraguan insurance sector in 2008, as reported by Fitch in a special report.
Tuesday, April 14, 2009
Thanks to the growth in insurance premiums in the period and progress in costs and accident rates, the sector was able to overcome the operating loss that occurred last year (especially the state insurance company), registering a combined index of 96.3% in 2008 compared to 103.7% in 2007. The good operating performance has enabled the sector to more than offset the decrease in net financial income contribution (by private insurance companies in particular) and impact on the greater overall profitability. The expected decrease in the level of economic activity and thus in the sales of insurances implies a major challenge for the sector and for protection of the progress achieved in the short term. At the close of the previous year, net insurance premiums totaled C$2.1 million, 14.0% above the amount registered in 2007. The faster growth in the case of private insurance companies (17.1%) is worth noting, taking into account the significant growth in premiums of Metropolitana Life Insurance Company (35.1%) and Lafise Insurance (25.7%). For its part, the INISER (Nicaraguan Insurance Institute) experienced a growth of 8.6%. The positive growth of the sector has been primarily in the business of auto and life insurance.
"For the sector's improvement, it will be key to adjust fees for products with high accident rates, as well as more careful subscription"
Fitch Central America Special Report: "Salvadoran Insurance Sector: Bi-annual Performance and Short Term Outlook."
Fitch Ratings highlighted a 26.5% growth in net results by the Salvadoran Insurance Sector as compared to 2007.
Private insurers are beginning to outperform the state insurance company and have so far captured a 40% market share.
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