Latin America reinsurance sector set for a boost: ratings agency
Economies across Latin America are set to experience improved economic performance and reduced political upheaval in 2020, according to findings from ratings agency AM Best.
According to AM Best, GDP across the continent as a whole is expected to increase by 1.8% by the end of 2020. Latin American countries saw just 0.2% growth in 2019.
The International Monetary Fund (IMF) forecasts still stronger growth in 2021, with GDP across the continent growing by 2.3%.
AM Best has reported a lessening of consumer price index inflation, political instability and volatility in the region's capital markets. The combination of these factors will boost investor confidence and FDI, the agency reported.
While the reinsurance market has remained relatively resilient, AM Best forecasts a strong growth trajectory through 2020. Yet the potential for growth within the insurance sector is very strong: insurance penetration rates across the region average a lowly 2.3%.
Yet many markets remain below their peak: Brazilian premiums reached $75bn in 2013, and the current premium market in the country is barely 60% of this.
AM Best is an American credit rating agency based in New Jersey and focused on the insurance industry.
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