Lack of protection: only 1.2% of livestock in Latin America is insured

The continent's appetite for meat is spurring an increase in cattle production. The rate of insurance for this sector should grow as well, according to the Swiss Re report Livestock insurance in Latin America: animal production and the current livestock scenario in the region.

Latin America is responsible for 13% of global cattle production, and this sector is growing twice as fast as in other parts of the world. But the penetration of insurance has not increased at the same rate: only 4.7 million animals are insured out of a total herd of 395 million in the region.

The cattle sector contributes 45% of the agricultural added value in Latin America and the Caribbean, generating USD 79 billion annually. This segment has grown nearly 4% annually in recent years. Despite its importance, livestock insurance has yet to reach significant levels in this market.

Studying a very promising market

The recent Swiss Re publication Livestock insurance in Latin America: animal production and the current livestock scenario in the region reports there are several factors that could change this scenario. Existing coverage adaptation, rate reduction and deductions in the policies being commercialized, along with greater dispersion, creation of a subsidy policy, and new marketing strategies are some of the factors.

Health regulations for livestock could also help increase the penetration of insurance, given that the outbreak of an epidemic disease would have a direct impact on the export market of the affected country. However, it is not only disease that can affect domestic and international trade; climate events such as drought or excessive rain can also cause major losses for producers.

Outlook for livestock production and insurance

The outlook for livestock production in Latin America is promising due to the increased consumer demand for meat and the consequent rise in meat prices and other animal-based products. In addition, the sector growth trend should be sustained over the coming years. This indicates a future development and expansion of livestock insurance. The opportunity for our industry is huge and is there, now.

Published 5 May 2014


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