Medical expense insurance increased 18.47% in 12 months

“The generalized downward revision of the estimates of world economic growth, inflation and the increase in uncertainty due to the conflict in Ukraine are clouding the outlook for the development of the business and the profitability of the insurance sector in 2022, in an environment of high volatility in the financial markets”, according to a document of Mapfre Economics.

He mentioned that inflation erodes business margins and the purchasing power of households, which makes it difficult to transfer the increase in the costs of claims and other expenses of insurance companies to insurance prices.

”Regarding Life insurance, the persistence of higher-than-expected inflation is leading to a tightening of monetary policy in a large part of both developed and emerging markets (with a few exceptions, such as China), with increases in interest rates that favor the development of Life insurance linked to savings and traditional life annuities, although situations of negative real interest rates persist in many markets, together with higher and longer-lasting inflation than expected, which can erode the savings capacity of households, reducing the demand for this type of product that cannot offer a sufficient rate guarantee to compensate for the loss of purchasing power as a result of the inflationary process”.

In Mexico

The insurance industry in the Mexican Republic it is solid and solvent, because it triples the amount of capital required by the Law, according to the spokeswoman for the Mexican Association of Insurance Institutions (AMIS).

According to data revealed by the National Insurance and Bonding Commission (CNSF) as of the second quarter of 2022, insurance industry premiums reached 350,561 million pesos, registering an annualized advance of 4.38 percent.

Direct premiums for operations in the Life segment totaled 136,396 million pesos, the Automobile segment registered 58,390 million pesos, the Accident and Illness segment added 58,390 million and the Damage without automobiles reported 66,447 million pesos at the end of the second quarter of 2022.

AMIS reported that the distribution of coverage by market in 2022 was as follows: Life with 38.9% (39.9% in 2021), Damage without cars with 19.0% (20.6% in 2021), Cars with 16.6% (15.9 % in 2021), Accidents and Illnesses with 19.2% (16.8% in 2021) and Pensions with 6.3% (6.8% in 2021), highlights the growth of the Accidents and Illnesses segment as a response to the protection of contagious diseases, such as the Covid-19.

It should be noted that “the industry paid 200.374 million pesos to its policyholders, the Life segment is the operation with the highest amount.” It is followed by Life with direct claims for 88,834 million pesos.

patricia.ortega@eleconomista.mx