In this AMBestTV episode, Alfonso Novelo, senior director of analytics, AM Best, said the economic outlook for Mexico shows a possible slowdown ahead; however, given the lower penetration of insurance products, insurers still face growth opportunities.
Click on http://www.ambest.com/v.asp?v=mexicoeconomy519 to view the entire program.
Novelo discussed the slowdown of Mexico’s economy.
“The deceleration might also impact the performance of the insurance industry. What is normal in the Mexican market is that it follows the economy. Given the adjustment on the projections for growth of the economy from a number of participants in the market, the central bank, the Ministry of Finance, investment banks, etc., AM Best believes that this will also affect top-line performance in the insurance market,” he said.
However, Novelo added that despite the economic issues, the insurance market still could weather the turbulence and achieve growth.
“There is a lot of potential in segments that have not been developed,” he said. “The capital levels of the companies and the size of the surplus that they have above the regulatory minimum of capital requirements are factors that could help the companies mitigate the impact from this volatility in the financial markets.”
AM Best has a stable outlook on Mexico's insurance industry.
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