Creating Favorable Environment to Improve Profitability to Emerge as a Key Driver for the Life Insurance Market in Latin America until 2020, Reports Technavio

LONDON--()--Technavio analysts forecast the life insurance market in Latin America to grow at a CAGR of close to 6% during the forecast period, according to their latest report.

The research study covers the present scenario and growth prospects of the life insurance market in Latin America for 2016-2020. To calculate the market size, the report considers the total premium volume in Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Panama, Peru, Uruguay, and Venezuela.

Technavio analysts highlight the following three factors that are contributing to the growth of the life insurance market in Latin America:

  • Creating favorable environment to improve profitability
  • Use of multiple channels to reach broader audience
  • Rise in life expectancy to increase demand for retirement policies

Creating favorable environment to improve profitability

Life insurance companies are enforcing professional and disciplined underwriting practices to ensure healthy growth in emerging markets such as Latin America. Such initiatives should ensure companies operate on a sustainable basis. In addition, Technavio expect capital management of the life insurance market to support vendors' growth and tighten solvency capital requirements during the forecast period. In the current market scenario, life insurance policymakers play a strong role in strengthening private sector vendors by providing them with incentives and allocating sufficient resources dedicated to regulatory infrastructures. This can be done by formulating strategies for different term endowment plans and whole life insurance policy plans.

Policymakers in Latin America support insurance-specific efforts of different vendors. Such initiatives include private pensions, making health or workers’ compensation insurance compulsory, and introducing and enforcing other obligatory lines of life businesses such as ordinary whole life plan, level-term life insurance, and money back endowment plans,” says Amit Sharma, a lead analyst from Technavio.

Use of multiple channels to reach broader audience

In the last decade, Latin American countries have created an environment that is conducive to the growth of life insurance premiums. Conditions such as sound economic environments, product innovations, improvement in insurance regulations, and multiple distribution channels have also helped increase premium amounts. Life insurance regulatory bodies and other policyholders are encouraging healthy competition as low inflation has cast a positive effect on insurance premium growth. In the present scenario, markets have reduced state involvement and established insurance-enabling regulations.

Insurance product innovations in these regions also contribute to the rapid growth of the life insurance industry. Vendors use multiple distribution channels to reach a broader audience in the Latin American markets and this has powered a rapid growth in the industry,” states Amit.

Rise in life expectancy to increase demand for retirement policies

The shift in demography has pushed insurance firms to make use of the actuarial and sales model for better pricing. The rise in population of baby-boomers and the emerging generation Y have sparked growth opportunities for different insurance products. Technavio estimates that a slowdown in the population of insurance buyers may cast a dampening effect on the growth of the insured value for personal line insurance. Growing middle-class populations, the surge in global commercial and entrepreneurial operations, the expansion of industrialization, growth in consumer awareness regarding insurance products, and rising disposable incomes across different regions worldwide have transformed the insurance industry. Therefore, brokers that act as intermediaries between insurers and the insured and insurance companies provide both insurance security support to customers, in addition to various other personalized services. This has boosted the demand for insurance services and products.

Life expectancy in Latin America 2015

Countries in Latin America       Life expectancy (years)
Argentina       76.32
Brazil       75.17
Chile       80.06
Colombia       78.07
Ecuador       75.74
Mexico       77.14
Panama       77.37
Peru       77.38
Uruguay       77.43
Venezuela       75.92

Source: Technavio

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Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.

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Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 630 333 9501
UK: +44 208 123 1770
www.technavio.com

Release Summary

Technavio analysts forecast the life insurance market in Latin America to grow at a CAGR of close to 6% during the forecast period, according to their latest report.

Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 630 333 9501
UK: +44 208 123 1770
www.technavio.com