This rise in the Mexican general insurance industry is attributed to, according to GlobalData, a recovery in automobile sales and rising medical costs.
This is according to GlobalData and its Insurance Database. According to the firm, the general insurance market in Mexico witnessed a drop in growth to 8.9% in 2022, compared to 11.2% in 2021.
In addition, with the inflation rate touching a two-decade high in 2022, consumers were forced to purchase only essentials and cut down on other expenses, leading to a decline in the growth of general insurance in 2022.
Personal Accident and Health insurance was the leading line of business in the Mexican general insurance industry with a 32.9% share. That is expected to register 10% growth in 2023 due to increasing medical costs which are resulting in higher sales of health insurance policies.
Furthermore, motor insurance accounted for a 30.1% share of the general insurance industry’s GWP in 2022.
Property insurance is the third largest line of business and accounted for 19.7% share of the general insurance GWP in 2022.
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Sutirtha Dutta, insurance analyst at GlobalData, comments: “The rise in insurance awareness after the pandemic is also supporting PA&H insurance growth. Moreover, the government’s decision to close Seguro Popular, a program aimed to guarantee universal access to health services, in 2020 and replace it with other schemes has impacted 53 million people. This is prompting people to buy private health insurance in the absence of other alternatives. Against this backdrop, PA&H insurance is expected to grow at a CAGR of 9.9% over 2023-27.”
Dutta concludes: “High medical expenses, growing automobile sales, and investment in infrastructure projects will continue to support the growth of the Mexican general insurance market over the next five years. However, high inflation and increasing claims from natural calamities will have a negative impact on the profitability of general insurers.”