OLDWICK, N.J.–(BUSINESS WIRE)–In this episode of AMBestTV, Eli Sanchez, associate director, AM Best, said the rating agency’s negative market segment outlook on Chile’s insurance sector is based on declines in insurance activity, tied to the pandemic and longer-running economic issues. Click on http://www.ambest.com/v.asp?v=chileoutlook_english720 to view the entire program.
Sanchez addressed to what extent COVID-19 is affecting insurers in Chile.
“As of March 2020, there has been a 10% contraction in the overall insurance industry,” said Sanchez. “There was a contraction of around 1.8% last year. AM Best has seen declines, especially in the life side, related to annuities, some accident and health, as well as the property/casualty segment. Additionally, there has been lower economic activity. As of May, the monthly economic indicator contracted by approximately 15%. That puts a lot of pressure on underlying industries that use insurance as a way of protecting its relative assets.”
Chile is having economic problems that the pandemic has exacerbated. Sanchez spoke about how COVID-19 has affected insurers’ ability to grow.
“With lower global economic activity, there have been tensions, specifically commercial tensions between China and the United States. These countries are important partners for Chile. These tensions have created a lot of flight to quality, which have threaten the Chilean peso. In addition, with the tensions in trade, copper prices have come down. That limits a lot of the growth that could happen in the country, which in turn affects a lot that could happen in the demand for insurance.”
To view this video in Spanish, please go to http://www.ambest.com/v.asp?v=chileoutlook_spanish720.
To access the related market segment report, titled, “Market Segment Outlook: Chile Insurance,” please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=532765.
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