MEXICO CITY--(BUSINESS WIRE)--Due to the transition to a Solvency II–type model in Mexico and the resulting decreased level of required technical reserves, the country’s insurance sector experienced an immediate benefit to its earnings, as reflected by first-quarter 2016 results, according to a new A.M. Best briefing.
The Best’s Briefing, “Initial Impact of Solvency II Regulations and Supervision on Mexico’s Insurance Market,” states that the operating performance of the sector in first-quarter 2016 was favorable, coming on the heels of the implementation of the Pillar I framework, which sets out quantitative requirements. According to preliminary results from Mexico’s regulator, the country’s insurance sector grew premiums by 14.5% in first-quarter 2016 compared with the same period a year ago, and insurers recorded an average combined ratio of 91.0. Overall, as of March 2016, the Mexico insurance sector recorded a profit of 12.2 billion pesos (USD 636.5 million), which in just one quarter, represents nearly half of the profit generated during 2015.
The first-quarter 2016 results reflect the Pillar 1 framework, which went into effect at the start of 2016, and includes a comprehensive economic balance sheet assessment and a calculation of technical provisions by the best-estimate criteria. In particular, life insurance operations grew 25.7% in first-quarter 2016 year over year, mainly due to accounting records changing from being based upon receipt of payment, to being recorded according to the contract term.
To access the full copy of this briefing, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=254682.
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