MEXICO CITY--(BUSINESS WIRE)--AM Best has revised its market segment outlook on Chile’s insurance industry to stable from negative, owing to market dynamics, effective regulatory measures and economic recovery.
In its Best’s Market Segment Report, titled, “Market Segment Outlook: Chile Insurance,” AM Best notes Chile’s USD 10.4 billion insurance market as the fifth-largest in Latin America and one of the most developed in terms of penetration, financial flexibility and depth. Volatile financial markets, inflationary pressures and a changing regulatory framework has affected the industry’s operating performance, but AM Best expects the industry to grow in an improving economy.
Property/casualty insurance premiums expanded by 9.6% in 2021, while the life segment was flat due to regulatory and market developments. Overall, the market grew year over year by 2.9%, with net income rising 58% owing to life companies’ exceptional investment results. The non-life segment’s net results were positive, but flat compared with the previous year. AM Best expects further growth in this segment, as public expenditures and global economic conditions improve.
The health segment also was profitable in 2021, according to the report. Health premiums dropped by 2.5%, but the number of insurance policies more than doubled due to compulsory COVID-19 coverage, which private-sector employers had to acquire for their employees.
“Challenges still remain for Chile’s insurers, including the effects of COVID-19, global inflation, the devaluation of the currency, and to a lesser degree, domestic social and political events. However, risk-adjusted capital levels among domestic insurers remain solid and resilient against evolving market risks,” said Eli Sanchez, associate director, AM Best.
AM Best has observed fewer factors limiting the overall performance of Chile’s insurance companies as the country’s economy has benefited from prompt action by monetary and fiscal authorities. Recent global and domestic market developments can be expected to felt throughout 2022, but more mildly than in 2021. AM Best will continue to monitor developments in Chile’s insurance market, as well as its exposures to domestic and global natural risks and financial volatility.
To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=322097.
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. For more information, visit www.ambest.com.
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