As the current worldwide economic turmoil has taken its toll on insurance markets, a number of Latin American regulators and commentators have expressed the opinion that the peculiarities of the Latin American insurance markets may make them particularly resilient in the face of a potential global downturn. According to these sources, despite the current crisis, Latin American insurance markets remain stable and likely to continue to grow.
In Brazil, the Superintendencia de Seguros Privados (SUSEP), recently released a statement reiterating that it does not believe the Brazilian market is at risk to the factors at play in the U.S. crisis. In support of its position, SUSEP noted that the investment of reserves of Brazilian insurance companies is rigidly and strictly controlled by SUSEP and such reserves may not be invested in "high risk" products. SUSEP also noted that the strong growth in the Brazilian insurance market that has been seen since the beginning of the year continued in August, with premiums (excluding health) in the first 8 months of the year totaling 17.3% more than the same period the prior year.
In El Salvador, the Asociacion Salvadorena de Empresas de Seguros (ASES) recently confirmed that the 14 insurance companies operating in the country have sufficient solvency to meet any obligations. ASES' executive director, Raul Betancourt, noted that technical reserves had increased 11% in the first half of 2008 and further commented that he did not believe the financial crisis would have a significant affect on the insurance market in El Salvador. Mr. Betancourt explained that the Salvadorian insurance market makes up only a small part of the national economy and engages a disproportionately wealthy client base in the country that is largely isolated economically from the majority of the population. As a result, he believes, existing insureds are able to withstand economic pressures and are unlikely to cancel policies even when money becomes tight for much of the population. Therefore, ASES expects the insurance market in El Salvador to continue to grow this year at a rate of 5-6%.
In Paraguay, the director of the Superintendencia de Seguros, Diego Martinez, recently stated that he believes the global financial crisis will have little impact on the Paraguayan insurance market because Paraguayan insurers hold very limited amounts of foreign assets. Pedro Flecha, the president of the Asociacion de Administradores de Fondos de Pensiones, likewise stated that the crisis should have little affect on the country's private pension system.
In Argentina, Fitch Ratings reports that, despite difficulties due to inflation and a decrease in investment returns, the insurance market has grown by an average of 12.8% annually over the last four years. The recent Fitch report likewise states that prospects for Argentina’s insurance market in general look bright in large part due to insurers’ increasingly transparent policies and procedures, the unveiling of new and varied insurance products, and a geographic spreading of risks.
Regulators and commentators in Bolivia, Colombia and Ecuador have also recently predicted that the global economic crisis will not take a major toll on their domestic insurance markets, citing strict regulation of insurance companies' reserves and investments and continuing strong growth trends.