Insurance in Latin America: focus on personal lines

Our economists carried out a research on the personal lines segment in Latin America. The results of this study bring our attention to the untapped potential of this segment.

Why Personal Lines?

The new insights study provides an overview of personal lines insurance in Latin America. The report estimates that the personal lines business generated a premium volume of USD 88bn in 2008, which corresponds to 84% of the region’s total premiums. The segment grew in recent years due to the favorable economic and regulatory environment. Personal lines also received a boost because insurance companies redesigned their products and leveraged multiple distribution channels in order to efficiently serve a wider customer base. The personal lines business is expected to grow at an average annual rate of 7% in real terms, which is more than twice as fast as the region’s economy.

In 2008, premium volume in Latin America was USD 105bn

Total premium volume in Latin America and the Caribbean was USD 105bn in 2008, or 2.5% of insurance business worldwide. The life and non-life sectors accounted for 40% and 60% of premiums in Latin America respectively. Insurance premiums are concentrated in the six largest markets – Brazil, Mexico, Argentina, Chile, Venezuela and Colombia – which together account for 91% of the regional premium income.
Growth of insurance premiums has been robust in recent years. Even though penetration and density have improved, insurance demand is still underdeveloped compared to other countries: on average, the region’s per capita spending on insurance was USD 176 in 2008, far below the world average of USD 618. Also insurance penetration – 2.5% of the region’s gross domestic product – was below the world average of 6.9%.

Personal lines insurance accounted for 84% of total regional premiums in 2008

In 2008, the estimated premium volume for personal lines insurance in Latin America stood at USD 88bn. Of this amount, non-life premiums accounted for USD 46.2bn, led by motor business, which generated just over half of the volume. The life & pension-related segment accounted for the remaining USD 41.5bn. Pension-related business in Brazil produced about 42% of premiums in this segment, while the life business in Mexico generated an additional 19% of the volume.

Personal lines benefited from the favorable economy. Insurers also redesigned their products and distributed them through multiple channels

Personal insurance growth until 2008 was driven by a favorable economic environment. Insurance companies also contributed to this positive development by redesigning their products and leveraging multiple distribution channels in order to efficiently serve a wider customer base. The successful implementation of bancassurance and alternative distribution channels was also facilitated by the regulatory environment.

Personal lines insurance premium is expected to grow to USD 175bn by 2019

In the next ten years, personal lines insurance is estimated to grow at an average annual rate of 7.0% in real terms, exceeding the projected GDP growth rate of 3.3%. This would translate into a personal lines premium volume of USD 175bn by 2019.


Published April 2010

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