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XXIII Asamblea Annual de ASSAL
Round Table Discussion: Market Developments
April 25, 2012
Andrea Keenan
Assistant Vice President, Economic & Industry Research
Talking Points
1. Insurance Market Potential
– Global comparison
– Aggregate growth drivers
2. Country Risk and Obstacles to Growth
– How risk assessment is developed
– Country risk in the region
Percent (%) Change
Economic Growth in Latin America
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
-2.0
-4.0
-6.0
-8.0
-10.0
-12.0
2001
Latin America
World Average
Developing World
Series4
Series5
Developed World
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Premium Growth in Latin America
30
25
Nominal GDP
Premiums
Projection
20
15
10
5
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
-5
-10
-15
GDP Per Capita Drives Insurance
Market Penetration
14%
12%
Penetration (%)
10%
8%
6%
4%
2%
0%
$0
$10,000
$20,000
$30,000
GDP per capita
$40,000
$50,000
$60,000
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
$US per capita
GDP Per Capita in Latin America
12000
10000
8000
Trendline
6000
4000
2000
0
Country Risk
The risk that country-specific factors could adversely affect an insurer’s
ability to pay its financial obligations
Macroeconomy
Economic Risk
Prospects
CRT-1
Lowest Risk
Government Finance
Business Environment
Government Stability
Political Risk
Social Stability
CRT-3
Moderate Risk
Legal System
Financial System Risk
Non-Insurance
Banking System
Reporting Standards &
Regulation
Sovereign Debt
Government & Legislation
Insurance
Supervisory Authority
Insurer Accountability
CRT-5
Highest Risk
Country Risk in Latin America
Country
CRT
Country
CRT
Argentina
4
Guatemala
5
Bolivia
5
Honduras
5
Brazil
3
Mexico
3
Chile
2
Nicaragua
5
Columbia
4
Panama
4
Costa Rica
4
Peru
4
Ecuador
5
Venezuela
5
El Salvador
4
Country Risk Relates to Insurance
Market Development
14.0%
12.0%
Penetration (%)
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Country Risk Score (from lower to higher risk)
Political Risks
World Bank Doing Business
Corruption Perceptions Index
Rank out of 183 countries
(higher score implies less perception of corruption)
175
Venezuela
8
147
Bolivia
Ecuador
131
Honduras
130
Nicaragua
122
Costa Rica
121
Brazil
120
Argentina
114
El Salvador
112
Latin America
7
6
5
4
3
2
93
Guatemala
63
Panama
World Average
1
54
0
41
Peru
39
0
50
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Chile
a
Bo
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Br
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Co
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Pa
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m
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47
Colombia
100
150
200
Pe
ru
Ve
ne
zu
ela
Mexico
Degree of Government Intervention
5.00
4.50
World Average
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
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For additional information
www.ambest.com
Andrea Keenan
[email protected]