Boston, MA -- (SBWIRE) -- 07/12/2012 -- At first glance, the newsflow from Argentina's insurance sector in Q211 looks good. There has been strong growth in premiums in both the non-life and the life segments through 2011. Several companies have highlighted that their Argentine businesses are contributing meaningfully to the development of their regional operations. Some players have confirmed that profitability has been improving. Unlike in other parts of the world in 2011, or Chile in 2010, there have not been major catastrophe losses. In the non-life segment, Australia's QBE has emerged as a major player. QBE bought HSBC La Buenos Aires Seguros from HSBC and has entered into a 10-year bancassurance deal with the latter's bank in Argentina. Meanwhile, many of the leading local groups continue to benefit from their associations with government-backed financial institutions, from the support of policy-holders who see their own interests as being closely aligned with mutual insurers, and/or strong brand names.
View Full Report Details and Table of Contents
Nevertheless, we continue to highlight the structural weaknesses of Argentina's insurance sector. Both of the main segments are under-developed by most metrics. In particular, Argentina's long history of financial instability means that households tend to be reluctant to use life insurance which, by definition, requires a long-term contract between the client and the underwriter of the risk. The competitive landscape is fragmented: many of the largest local groups lack scale in anything other than a purely Argentine context. In past reports, we have suggested that multi-national companies with operations in Argentina face barriers to exit. In view of the BBVA and QBE/HSBC deals, we would describe this aspect differently: multi-nationals can exit the Argentine market, but most easily if they have a business that another multi-national wants to buy and/or can assist with distribution. Meanwhile, regulatory changes and policy shifts in the insurance sector - as in the broader financial services industry - are often motivated by politics rather than economic rationalism.
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff will help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.
Browse all Financial Services research reports at Fast Market Research
You may also be interested in these related reports:
- Hong Kong Insurance Report Q3 2012
- Slovenia Insurance Report Q3 2012
- Poland Insurance Report Q3 2012
- United States Insurance Report Q3 2012
- Slovakia Insurance Report Q3 2012
- China Insurance Report Q3 2012
- Brazil Insurance Report Q3 2012
- Romania Insurance Report Q3 2012
- Greece Insurance Report Q3 2012
- Hungary Insurance Report Q3 2012