|Eli Sanchez |
+52 55 1102 2720, ext. 122
Manager, Public Relations
+1 908 439 2200, ext. 5159
Senior Public Relations Specialist
+1 908 439 2200, ext. 5098
FOR IMMEDIATE RELEASE
MEXICO CITY - JANUARY 13, 2023 08:49 AM (EST)
AM Best is maintaining its stable market segment outlook on Guatemala’s insurance market, citing the country’s favorable economic dynamics and capable management.
The Best’s Market Segment Report, “Market Segment Outlook: Guatemala Insurance,” states that government efforts continue to improve Guatemala’s fiscal situation, creating special economic zones and incentivizing infrastructure development, which is reflected in the country’s ongoing economic growth.
Guatemala’s insurance market continues to evolve thanks to active management by leading companies and by the industry’s regulator. The insurance market expanded in 2021 by 11.8% (5.6% in real terms) to USD 1.1 billion, with a favorable combined ratio of 93.4 despite long-tail COVID-19 claims and a rebound in claims frequency from the resumption of mobility. Higher premium issuance has further strengthened revenue. The market continues to expand, as evidenced by 16.1% growth year to date as of September 2022. Technical results have recovered to 2020 levels, when claims activity was very low. Pricing and revenue from deferred charges and rights of issuance improved in 2022, indicating positive momentum in revenue generation for insurance companies. Net results as of September 2022 amounting to USD 108.7 million for a return on equity of 24.5%, were the highest in five years.
“Since the beginning of the COVID-19 pandemic, insurers in the country have shown they can manage receivables collections, volatile investment yields, catastrophic events and growing competition,” said Eli Sanchez, associate director, AM Best. “Going into 2023, market conditions have improved, with higher interest rates and efforts to further diversify distribution channels.”
AM Best expects net growth in 2022 to come mainly from health and life policies, which as of November 2022, accounted for 9.1 percentage points of total growth. The property/casualty lines, given their importance to the market (76%), continue to drive overall growth. As expected, claims growth was driven by life offerings and the resurgence of major medical expenses in the accident and health line.
AM Best expects the market to remain competitive as the economy continues to grow. Rising interest rates and inflationary pressures domestic and abroad, which could affect the market dynamics and companies’ financial strength, remain key factors to monitor.
To access the full copy of the Guatemala market segment report in English and Spanish, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=327932 .
To view current Best’s Market Segment Outlooks, please visit http://www.ambest.com/ratings/RatingOutlook.asp .
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.