New Laws for the Insurance Market

With the aim of boosting the insurance market in El Salvador, business leaders in the sector are proposing changes to the legislation that would allow for expanding marketing channels for policies.

Thursday, May 24, 2018

After the Salvadoran insurance market recorded growth of 1% in 2017, bills have been prepared that have been submitted to the Presidential House, which seek to reactivate the sector, through the commercialization of microinsurance focused on people with low incomes.  

See "Little Growth in Salvadoran Insurance Market"

According to representatives of the Salvadoran Association of Insurance Companies (ASES), the projects that have been presented are the law on insurance activities and the law on insurance contracts.

For his part, the president of ASES, Pedro Geoffroy Rivas, explained to that " ... The aim is to "expand sales channels", this means making it easier to acquire insurance, not only through traditional channels, such as in a bank, with an insurance broker and in the insurer itself."

Geoffroy adds that the changes would open " ... the door to other entities to sell insurance and even so that policies can be bought from a cell phone. Along with these channels, cheaper insurance would have to be introduced." 

See "What is changing  in insurance and how could it affect your wallet" and "Cant afford health or life insurance? This law could be the solution." (In Spanish)

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Between the first semester of last year and the same period in 2018 the value of premiums written in El Salvador saw almost no change, following the line of the weak growth of 1% reported between 2016 and 2017.

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"This type of insurance is very interesting because it brings our industry's benefits to poor people who don't figure on company payrolls," said Raúl Betancourt, executive director of the Salvadoran Insurers' Association (Ases).