Co-operative and mutual active in the insurance sector in Latin America have achieved record aggregate premium volumes in 2013, according to a recent report by the International Cooperative and Mutual Insurance Federation.
The report, Market InSights: Latin America 2013, reveals that the mutual and co-operative insurance sector has recorded year-on-year growth since the crisis with premium income in 2013 reaching USD 19.2bn, 150% greater than in 2007 (7.7bn).
With 29.4bn in total assets, the sector includes approximately 100 mutual/co-operative insurers in the region, which serve 26 million members and employ 37,000 people.
The co-operative and mutual insurers have increased their market share by two percentage points since 2007, from 8.8% to 10.6% in 2013, a proportional increase of 20%. The largest Latin American insurance market is in Brazil, which accounts for a third of the region’s mutual and co-operative premiums.
However, Brazil’s contribution to the total mutual business in the region fell from almost 35% in the previous year, due to weakened premium growth in 2013 and the depreciation of the local currency to the US dollar.
Co-operative and mutual premiums have also continued to grow in Argentina (USD $4.3bn) and Venezuela (USD $3.1bn), contributing 23% and, respectively, 16% of the total co-operative and mutual premiums. In Colombia the co-operative and mutual insurance sector reached USD $810m in premiums, accounting for almost 10% of regional business.
In Paraguay, one of the region’s smallest insurance sectors, over 30% of the market was held by mutual and co-operative insurers in 2013, while in Argentina and Venezuela they account for 25.1% and 22.6%.
ICMIF’s report looked at 15 Latin American insurance markets. Around 80% of these (12) experienced a growth in mutual market share, including all five of the largest insurance markets: Brazil, Mexico, Argentina, Venezuela and Chile.
In terms of life business, only 11% of total mutual insurance revenues were generated by the life sector in 2013. The regional life market share of the mutual sector was 2.7% in 2013, a decrease from 4% in 2007. However, co-operative and mutual insurers held over 30% of their respective life markets in 2013 in Costa Rica (32.4%), Panama (31.9%) and Ecuador (31%).
Co-operative and mutual insurers also witnessed an increase in non-life premium volumes in all markets in Latin America in 2013. Nevertheless, mutual and co-operative growth in most regional markets was weaker than in previous years and below the market average growth. The full ICMIF Market Insights report is available online.