Casualty insurance in Latin America
Swiss Re offers Casualty insurance for motor, liability and personal accidents lines of business.
The casualty business is a fast-growing area within the insurance industry in Latin America, and the outlook for future growth is positive. It currently represents an important share of insurers' business mix, and it is expected to grow in importance going forward. Regulators, insurance companies, and policyholders across Latin America are increasingly focusing on casualty insurance as a form of protection and revenue growth. This will create significant new opportunities for insurers, but also increase pressure on their capital positions.
We expect that most markets in Latin America will exhibit strong growth in casualty business in 2015 due to a sizeable pipeline of infrastructure projects across the region, lower global oil prices, and changes to regulation and tort systems. At the forefront of legislative reform drive is Mexico, which recently increased awards for bodily injury for certain products. It can be assumed that other markets in Latin America will soon follow suit. Furthermore, changes to solvency regimes in Mexico, Brazil, Chile and other markets may have an additional impact on the casualty business. For instance, some insurers may choose to enter the motor business in order to diversify their risk and mitigate the impact of higher solvency capital requirements.
Average auto penetration in Latin America's six largest economies (Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela) was estimated to be 180 per 1,000 people, up from 119 in 2004 and compared to 79 in China. Today, motor insurance is the biggest non-life line of business in Latin America, representing 48% of total non-life premiums.
Working together with our clients
We are working together with our clients to help them get the most out of their capital through reinsurance solutions for motor portfolios that offer unmatched capital management flexibility. Our solvency relief solutions helps our clients control when and how much they exercise their options, helping them effectively turn volume into profit. With the new Solvency regimes taking effect soon, we are supporting clients to improve their competitive edge under the new risk-based regulation.
To learn how we are helping our clients face challenges brought by the new Solvency regulation, go to our Solvency page.