Vehicle Insurance: Low Penetration Persists

The increasing importation of used vehicles, the increase in the number of motorcycles and the perception that the risk to which drivers are exposed is low, are some of the reasons that explain why the penetration of vehicle insurance in the Guatemalan market is still only 10%.

Thursday, January 21, 2021

According to data from the Superintendence of Tax Administration (SAT) at the end of 2020 there were 4.11 million vehicles registered nationwide, this figure exceeded by 8% the 3.79 million reported at the end of 2019.

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Although Guatemala's vehicle fleet shows a clear upward trend, the percentage of units acquiring insurance is not increasing at the same rate.

Figures from the Guatemalan Association of Insurance Institutions (Agis) show that in 2020 the accumulated total of insured vehicles amounted to 392 thousand, which is equivalent to about 10% of the total vehicle fleet.

See "Central America: Evolution of the Insurance Market"

Christian Nolk Rodríguez, president of Agis, told that "...'The gap is getting bigger and bigger, and instead of getting closer to a greater number of cars in transit having the backing to face the probable damages they could cause to other people or property in an accident, we observe that last year fewer people insured their automobiles'."

The importation of used vehicles, the resale of vehicles and the exponential increase in the motorcycle fleet are factors that expand that gap, explained Nolk.

For Ricardo Gaviria Fajardo, consultant of Movernos Seguros FIA/ IDB, "... the figures show that the vehicle fleet is growing faster than insurance premiums and this may depend on the type of vehicles that are entering the country, the willingness of buyers to access comprehensive insurance to protect their assets in the event of an accident and the perception of the risk to which they are exposed."

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