Mexico City (Dow Jones) On Wednesday the Mexico’s insurance industry said there will probably be a growth of 7% in premiums this year as the business and the consumers continue to buy insurance even in the midst of deep recession.
“We originally had expected to see a very little growth in 2009, about 1.5% or 2% in real terms. Based on the data we have seen, I would say we are going to have growth of 6.5%-7,” president of association AMIS Juan Ignacio Gil Anton, said at a press conference.
“We originally had expected to see a very little growth in 2009, about 1.5% or 2% in real terms. Based on the data we have seen, I would say we are going to have growth of 6.5%-7,” president of association AMIS Juan Ignacio Gil Anton, said at a press conference.
Gil Anton also said that November and December will be the key month to gauge the industry’s growth prospects for the year 2010 when many businesses renew their policies.
"I think 2010 is going to be a better year for auto insurance. I think it will also be a good year for property and casualty insurance because business investment will recover and there are big plans for infrastructure projects," he said.
Insurance industry of Mexico reported direct premiums of 173.28 billion pesos ($13.3 billion) during the nine months of year 2009. According to the sector regulator CNSF, there is an increase of 8.1% from the year-ago.
There would have been growth of more premiums of 5.3 % if not for a two-year contract awarded this year by the state oil monopoly Petroleos Mexicanos.
The insurance industry has manage to grow even when the Mexico’s worst recession in an over a decade has increased rising unemployment.
The economy is expected to contract about 7% this year as the downturn in the U.S earlier this year hurt demand for the Mexican exports. Economist forecasts 3% growth next year.
Premiums in January-September from property and casualty policies rose 4.5 %, MXN39.44 billion, largely due to the Petroleos Mexicanos, while the auto insurance premiums fell 8.7%, to MXN33.43 billion, as the recession slashes sales of new vehicle.
Accident and health insurance premiums rose 1 %, to MXN24.44 billion; life insurance premiums grew 5.7%, to MXN70.34 billion, while the annuity premiums fell 2.2% according to CNSF.
In the first nine month of the year, the insurance industry made an operating profit of MXN13.19 billion.
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