The insurance industry kept on growing, albeit at a lower pace, in spite of economic and financial crisis.
In 2008 this industry sold 17% more insurance than in 2007, summing over $3 billion sales. It slowed considerably in 2009, but managed to maintain positive growth numbers.
From Martesfinanciero.com: "In order to achieve this, insurers had to resort to diverse measures, such as strategic alliances, brand changes, better prices and more services".
"For the sector's improvement, it will be key to adjust fees for products with high accident rates, as well as more careful subscription"
By the end of June 2009, net premiums had grown at an inflation adjusted rate of 9.8%, although lower growth should be expected for the end of the year, due to worse economic performance. Growth in individual insurance was remarkable (14% average), specially in collective life and accident and health, while general damage insurance saw a 7% increase.
In the first half of the year, the cost of insurance policies in the country increased 10.5% when compared to the same period of 2008.
Increases in auto accident and theft rates are one of the main drivers of this price increase.
"Another factor affecting prices is a 62% reduction in imports of new vehicles", explained journalist Louisa Reynolds in her article in Elperiodico.com.gt.
During the first five months of the year, insurance companies had profits of $11 million, 12.8% less than the same period last year.
The main reason for the decline in profits of the Guatemalan insurance companies was the accident rate. As of May 2009, the rate was at 65.8%, while in May 2008, it was at 56.5%.
Additionally, Mario Mendizábal, President of the Guatemalan Association of Insurance Institutions (AGIS, acronym in Spanish), indicated to the website Sigloxxi.com, that “the crisis has had an effect on insurance sales, but it hasn’t affected all types of insurance. Among the evidence is collective life insurance (which is paid by companies to its employees), which increased by 17%, says Mendizábal. On the other hand, individual life insurance policies fell 6%.”
Summa Financial Special: Presenting the classification and analysis of the regional financial system.
In the April edition, Revista Summa will present its bank, insurer and stock exchange rankings. On the whole, it shows a healthy sector with the capacity to face the challenges ahead. Regional banking groups have gained greater importance and the magazine identified ten that represented 33% of the assets for 2008.
The iniciative which would approve a new law for insurance companies was returned to the Economic Commission once more.
Some legislators believe that when the new law comes into effect it will close the market to international companies and will favor monopolizing the local companies, said lawmaker, Francisco Contreras, member of the CASA party.
According to Contreras, the law allows international companies to operate in the country, but it creates a lot of bureaucracy and there is the possibility that the companies will not want to invest in Guatemala.
Central America's leading insurer, Aseguradora Mundial signed an agreement with Swiss Life Network to broaden their cooperation in the region.
Aseguradora Mundial is the main specialized insurance unit of Panama-based Grupo Mundial. Swiss Life Network is a leader in the provision of insurance for employees.