Insurance: Profitability Falls

During the first quarter of the year in Nicaragua, premium income was down 6% from the same period in 2018, while claims payments increased 14%.

Wednesday, April 24, 2019

Figures from the Superintendence of Banks and Other Financial Institutions (Siboif) indicate that between January and March 2018, and the same period in 2019, premiums in the country fell from $55 million to $53 million.

In the case of payments made by insurance companies to cover expenses for claims increased from $20 million to $23 million for the quarters concerned.

Giancarlos Braccio, vice-president of the Nicaraguan Association of Private Insurers (Anapri), explained to Laprensa.com.ni that this decrease in sales is the result of "... two factors: the economic contraction and the restriction of credit by the national bank."

See "One Year in Crisis"

Braccio added that "... In the first instance, the premiums (insurance sales) of cars have fallen, the main reason is that the banks are not given financing, then what is being done is to renew the portfolio of people who have cars and who have it insured, and if you see a fall (in the insurance companies) is more than obvious because that boom that had been financing cars is not good at the moment, by the situation of the socio-political crisis, and is related because there is no one financing and the little that is sold is in cash, then you are going to see that fall."

This drop in sales in the insurance sector occurs in the context of the political and economic crisis that has been going through the country for more than a year, which has left consequences such as a sharp drop in production activity, outflow of investments and the disappearance of thousands of formal jobs, among others.

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