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The Latin American insurance market grew to 173.674 billion dollars in 2022, an increase of 15.9%

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  • Non-Life insurance growth in the Latin American market outpaced Life insurance owing to the recovery of the Automobile line.
  • The potential insurance market in Latin America amounts to 440.9 billion dollars, which is 2.5 times the current market in the region.

The insurance market in Latin America, a region in which MAPFRE is the leader in the Non-Life business, saw growth in 2022 of 15.9%, up to 173.674 billion dollars (164.397 billion euros at current exchange rates), following the 11.5% growth of 2021.

The growth of the insurance market in the region has been influenced by the better than expected performance of their respective economies, as well as a more appropriate interest rate environment for the marketing of life savings and annuity products due to the change in the monetary policy stance applied by the main central banks in the region.

Premiums in the Life insurance segment in Latin America, which represents 42.3% of total premiums in 2022, experienced growth of 15.3% measured in dollars, while those in the Non-Life segment increased by 16.4%, according to the report “The Latin American Insurance Market in 2022”, prepared by MAPFRE Economics and published by Fundación MAPFRE.

Within the Life business, premiums for both individual and group Life insurance policies, which represent 35.8% of the total premiums in the region, experienced a growth rate of 13.1% surpassing the 8.7% growth seen in 2021. Social and Pension insurance again experienced significant growth of 29.2% (30% in 2021), with a still relatively low weight in the region’s Life business, representing 6.5% of total premiums in 2022, although with an upward trend. MAPFRE Economics highlights the important contribution of the Colombian market to the growth of the Life insurance segment at the regional level, which combined with the good performance of the Brazilian market (the main market in the region) and other markets with significant weight such as Argentina and Chile.

In the Non-Life insurance segment, virtually every market in the region saw growth, with the Colombian market showing the lowest growth in dollar terms, in contrast to the significant growth in Life insurance. At the aggregate level, the Non-Life insurance segment outperformed the Life segment, driven by the resurgence of the Automobile line, which represents 17.1% of the total premiums in the region and grew by 25.6% (compared to 8.7% in 2021). This enabled it to surpass pre-pandemic premium levels. The Health line, for its part, slowed down, although it also performed well, with premium growth in 2022 of 10.4%. The growth of other lines of the Non-Life business, such as Workplace Accidents (24.1%) and Other liability (20.3%), was also noteworthy.

In terms of structure, Uruguay, Costa Rica and Nicaragua were the Latin American insurance markets with the highest levels of concentration. Peru, Venezuela, Honduras, Honduras, Panama, Dominican Republic, El Salvador and Guatemala presented index values typical of concentrated markets. The remaining Latin American markets reported indices below the threshold associated with moderate levels of concentration.

MAPFRE Economics emphasizes that the outlook for Latin America continues to be complex for the coming years, in a context of tightening external and domestic financial conditions due to restrictive monetary policies to control inflation, a slowdown in employment growth (with high levels of informal employment and low rates of labor market participation), coupled with deteriorating public accounts that limit fiscal room to support economic growth. In addition, the slowdown and potential slide into recession in the United States and the problems in China’s economy are contributing to the gloomy outlook for the coming years, as these are its two main trading partners.

Structural trends

The region’s average penetration rate (premiums/GDP) was 3.01% in 2022, higher than the previous year by 0.05 percentage points. This indicator improved in the Non-Life Insurance segment (1.74% versus 1.70% the previous year) and, to a lesser degree, in the Life Insurance segment (1.27% versus 1.26% the previous year). There continues to be an upward trend in insurance penetration in the region, where the main contribution has come from Non-Life insurance.

In terms of premiums per capita, the region’s average indicator was 276.4 dollars, a 15.2% increase compared to the previous year. The significant growth in premiums in the insurance industry in 2022 and the improved performance of exchange rates against the dollar explain this improvement in the level of density compared to the previous year, which already exceeded the pre-pandemic level.

The IPG for the Latin American insurance market is estimated at 267.2 billion dollars in 2022, up by 5.8% (14.5 billion dollars) from the previous year’s estimate. The structure of the IPG over the last ten years confirms the predominance of Life insurance.

You can read the full report here