During the height of the global financial crisis, a $2.3 billion financing package was granted for the Panama Canal Expansion project. When completed in 2014, this expansion will double the capacity of the Canal and act as the catalyst to an explosion of growth in tourism, jobs and foreign direct investment. This level of investment and explosive growth is not limited to Panama; it represents a trend across Latin America in the past decade as developed nations seek out new sources of investment and growth.
The illustrations in this report represent just a few of the events in the insurance industry over the past five years and give a brief glimpse at the scope of the regulatory changes affecting the insurance markets, and consequently, companies all over Latin America.
The global and local insurance market for Latin American business has undergone a number of changes recently. Lockton Global partners have combined to provide an update on key changes affecting risk management strategies in the region. Our role as insurance broker and risk management consultant is instrumental in navigating our clients through the changing market to ensure that risk management programs maximize cost-efficiency, coverage, and compliance.
Property Insurance Rates on the Rise in Latin America
Latin American insurance rates are projected to remain generally flat for the 2012 term throughout the region, with the exception of the catastrophic property risks and select local lines of insurance.
According to Roland Haiser of Lockton U.K., leading Latin American property insurers have not been immune to the large worldwide losses in 2011. While clean, non-catastrophe-exposed accounts are seeing renewal terms of flat to plus 5 percent, those with CAT exposure (Caribbean risk, Chile, Colombia, Mexico, Ecuador, and Venezuela) are seeing rate increases from 7.5 percent to 10 percent. Property insurance prices are hardening, but the rate increases and general implications of significant losses have been restricted by continuing strong competition and protection of market share. The broker’s ability to successfully translate risk management initiatives to the market now has direct implications of mitigating an increasingly hostile market environment.