The United States International Trade Commission recently released its report Property and Casualty Insurance Services: Competitive Conditions in Foreign Markets. In preparing its report, drafted at the request of the United States Trade Representative of the Office of the President of the United States, the USITC reviewed non-tariff restrictive measures in 72 countries.
Not surprisingly, one of the major conclusions of the report was that many of the most restrictive markets for property and casualty insurance lie in Asia and Latin America. Indeed, four of the largest Latin American insurance markets (Mexico, Brazil, Argentina and Venezuela) and several of the most significant Asian insurance markets (including China and India) were among the most restrictive countries in the report.
Through its econometric analyses, the report hypothesizes that P&C insurers’ adjusted profits in the most restrictive markets in the report are inflated by more than 35% due to trade restrictions. The report further concludes that relaxation of existing market restrictions would therefore “promote economic growth and stability by providing individuals and businesses with the means to manage risk at more affordable prices.”
The report also states that market liberalization in these restricted economies would benefit U.S. P&C carriers in the form of increased cross-border exports and sales and increased affiliate company sales. In fact, according to the report, were full liberalization achieved, the U.S. P&C industry could increase exports by 48% ($870 million) and increase affiliate sales by 28% ($39.1 billion).
If you would be interested in learning more about Asian and/or Latin American (re)insurance markets and/or regulatory environments, please click the “Email the Editor” button and provide your contact information for follow-up by an EAPD attorney.