Latam Insurance Market grew 16% in 2022
It reached a total value of $177 billion in written premiums, returning to 2014 levels.
Brazil, Mexico, Argentina, Chile and Colombia account for 85% of the market. Excluding Argentina and Venezuela, which have microeconomic issues, the countries with double digit growth were Uruguay 23%, Brazil 20%, Colombia 18%, Ecuador 17%, Bolivia and Chile 15% each.
When we analyze the compounded average growth rate (CAGR) for the last decade in Latam, written premiums did not grow. However, Peru with 5% CAGR, Puerto Rico with 4% and Mexico with 3%, were the highest growing ones amongst the largest countries. The Central American countries, as a sub-region, had a CAGR of 6%.
Penetration (WP vs GDP) for 2022 of 3.11% was a decimal higher than 2021 (3.01%) while density (premiums per capita) reached $282, growing 15% vs the 2021 value of $245.
Puerto Rico (7.0%), Chile (4.4%), Brazil (3.8%), Colombia (3.3%) and Argentina (3.3%) have penetration values over the Latam average. On the other hand, Puerto Rico ($226), Chile ($672), Uruguay ($576), Panama ($439), Argentina ($388), Brazil ($343), Costa Rica ($304), rank over the average in density.
On average in Latin America, each insurer wrote premiums for $208 million (17% more than in 2021). In Brazil this figure reached $889 million, in Mexico $503 million, in Colombia $331 million, in Peru $307 million and in Chile $275 million.
Local companies, those that only have operations in their domestic market, reached 46% of the WP (45% in 2021), global companies (those with operations worldwide) captured 37% (39% 2021), while regionals (which operate in more than one Latin American country) reached the remaining 17% (16% 2021).
The countries with the highest share of globals were Mexico 54%, Chile 53%, Ecuador 37%, Brasil 36%, and Peru 34%. Local companies have higher WP market share in Paraguay 70%, in Uruguay 69%, in Dominican Rep. 57%, Brazil 52%, and Argentina 52%. Finally, regional companies lead in Nicaragua 73%, Venezuela 68%, Honduras 62%, Panama 58% and Colombia 42%.
Regarding ceded premium, Latin America ended December 2022 with $26.9 billion, which meant an increase of 11% compared to 2021.
Mexico accounted for 25% of this amount, followed by Brazil with 20%, Chile 11%, Colombia 9%, Argentina 7%, Puerto Rico and Peru each 5%. These 7 countries together accounted for 83% of the total volume.
The countries with double digit growth in CP between 2021 and 2022 were Brazil 27%, Argentina 18%, Uruguay 16%, Ecuador 15% and Peru 13%.
The percentage of CP vs WP in average dropped 1 percentage point between 2021 (16%) and 2022 (15%). The countries with the highest level of cession were Honduras 54%, Nicaragua 53%, Bolivia and Dominican Rep. 40%, Ecuador and El Salvador 37%, Panama 34% and Guatemala 33%.
As of December 2022, Global companies captured 48% of ceded premiums (50% 2021), Local companies 37% (35% 2021) and regional ones 15% (15% 2021).
The countries with the largest share of Global companies in CP were Chile with 71%, Brazil with 68%, Mexico with 50%, Argentina and Peru with 44% and Uruguay and Colombia with 38%.
The classes of business with the highest market share of WP for 2022 were Pensions and Workers Compensation 27% (27% in 2021), Life 20% (21% in 2021), P&C 17% (18% in 2021), Motor Vehicles 17% (15% in 2021), Health 14% (14% 2021). These five lines accounted for 95% of the total, which is the same value as 2021.
Comparing 2022 with 2021, Motor Vehicles grew 26%, Surety-Credit and Pensions and Workers Compensation lines grew 20% each, Personal Accident 13%, Life and P&C 12% each and Health 10%. The Mandatory Motor Vehicle Accident Insurance - MMVAI (SOAT) line of business did not show any growth.
Between 2013-2022, the lines that had the highest CAGR for the decade were: Surety-Credit 1.8%, Life 1.3%, P&C 1.2%, while Pensions and Workers Compensation, Vehicles, Accidents, and SOAT decreased 0.2%, 1.9%, 3.3% and 9.7% respectively. The Health line had zero CAGR.
Regarding the percentage of CP vs WP, Surety and Credit is the highest ceder with 58%, followed by P&C with 55% and MMVAI (SOAT) with 18%. The other lines cede less than the average of 15%.
Finally, for 2023 we expect that the market will continue to grow, but at a slower rate. The main reason being the economic and politic instability that the Latin American countries suffer, which now even affects countries previously considered economically successful and politically stable such as Chile, Colombia, Mexico and Peru.