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Wednesday, January 20, 2010
Today's News Headlines
* RSA unit aims for affinity sales to be 40-45% of premiums in 2-3 years - Chile
* Cesce unit aims to break even in 2010 - Chile
* MetLife closer to buying AIG's ALICO unit - report - Regional
* One third of population lacking access to basic healthcare - World Bank - Argentina
* Companies selling SOAT must return US$19.4mn to clients - regulator - Ecuador
* CariCRIS places financial institutions on rating watch developing - Jamaica
* IN BRIEF Feller Rate affirms Principal unit at AA - Chile
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* RSA unit aims for affinity sales to be 40-45% of premiums in 2-3 years - Chile
Chile's largest P&C insurer, the local unit of UK's RSA, is aiming for affinity sales to grow to represent 40-45% of its total premiums from today's 35% within two to three years, RSA Seguros Chile's recently appointed affinity area VP Diego Panizza told BNamericas.
"Affinity is a part of RSA's strategy. We know that if we want to grow we have to develop these distribution channels, which will allow us to reach audiences that we couldn't through traditional sales channels," he said.
RSA Seguros Chile had 126bn pesos (US$256mn) in premiums as of end-September, for a 13.9% market share.
RSA Seguros Chile's growth in this area will come from the still large, untapped potential this segment bears for the insurer, the executive said.
"We want to develop more alliances than those which we have today. There are new potential partners with which we're interested in beginning to work with."
Affinity sales channels include retailers, banks, telecoms, utilities and other basic services that have an associated means of payment. Through these contact spots, insurers deploy various sales strategies, including sales forms, telemarketing and using the sponsor's sales force, among others.
RSA Seguros de Chile mainly sells car, home, unemployment and personal accident policies through its affinity sales channels, said Panizza.
The benefits of such partnerships are mutual for both the insurer and the affinity partner, as the latter can increase customer loyalty and complement its current offer of financial services, he said.
By Jorge Porter
Business News Americas
* Cesce unit aims to break even in 2010 - Chile
The Chilean unit of Spanish credit insurer Cesce expects to break even in 2010, after it began underwriting premiums in May 2008, and grow premiums by at least 50%, Cesce Chile CEO Julio Espinoza told BNamericas.
Cesce Chile posted a 26.6mn-peso (US$54,100) loss in January-September last year, losing 231mn pesos in its first year of operation.
Cesce Chile underwrote 896mn pesos in premiums in January-September, growing 297% compared to the same period 2008.
"Last year topped our expectations," Espinoza said.
The insurer ended 2009 with an estimated 4.1% premium market share and aims to increase that figure to 6% by year-end 2010, the executive said. Cesce Chile's long-term goal is to grab a 25% share of the local credit insurance market over the next 10 years.
Cesce will focus on maintaining its export and domestic credit insurance business as well as strengthening its guaranty insurance segment in 2010, the executive said.
In Latin America, Cesce already operates in Argentina, Brazil, Colombia, Mexico, Peru and Venezuela through its international insurance unit Ciac.
Ciac is made up of Cesce (51%), Spanish banks BBVA (NYSE: BBVA) and Santander (NYSE: STD), both with 16.5% stakes, and German reinsurer Munich Re with 15.9%.
By Jorge Porter
Business News Americas
* MetLife closer to buying AIG's ALICO unit - report - Regional
MetLife (NYSE: MET) has emerged as the lead bidder for AIG's (NYSE: AIG) ALICO life insurance unit, as the latter seeks to sell off the unit to help repay its US$182bn in government aid, The New York Times reported, quoting people briefed on the matter.
Under the terms currently being discussed, MetLife would pay about US$14bn-15bn for the AIG business, the newspaper said. AIG has said nearly US$9bn of the proceeds would go towards repaying the government assistance.
A deal for ALICO is still two to three weeks away, the sources reportedly said, cautioning that negotiations are ongoing and may still fail. MetLife and AIG held talks about a potential sale of the unit before, only to collapse over price.
In Latin America, ALICO has a presence in Argentina, Belize, Chile, Colombia, Panama, Peru, Uruguay, Venezuela and the Caribbean through a mixed ownership/operating structure.
By Business News Americas staff reporters
* One third of population lacking access to basic healthcare - World Bank - Argentina
Despite sweeping healthcare reforms, almost one third of the Argentine population lacks access to basic healthcare, according to a World Bank study.
During the early 2000s, Argentina's total expenditures on health, as a percentage of GDP, placed it among the top 20 countries in the world in per capita health spending. For example, Argentina spent 8.9% of GDP in 2000 and 10.1% in 2006. The government's per capita expenditures on health were US$382 in 2000 and US$251 in 2006.
Yet relatively high public health expenditures compared to other countries in the region as well as a restructuring of the country's insurance policy, quality and access to service remained a problem throughout the decade.
Although the aforementioned reforms improved access to healthcare for those employed in the formal sectors, they were not enough to provide access for the poor, and they lacked the necessary incentives to improve the quality of service provision, the World Bank said.
Moreover, the poor continued to be excluded from the health insurance system and had worse than average health indicators, the study reads.
By Business News Americas staff reporters
* Companies selling SOAT must return US$19.4mn to clients - regulator - Ecuador
The 17 insurance companies in Ecuador that sell mandatory auto accident insurance (SOAT) must return US$19.4mn to clients, banking and insurance regulator SBS head Gloria Sabando said in a statement.
The funds, which correspond to 30% of SOAT premiums in 2009, will be returned to users through a credit when they renew policies for 2010.
The measure is the result of executive decrees by President Rafael Correa that mandate the return of the funds.
A total 765,351 SOAT recipients will benefit from the credit, which applies to insurers AIG, Alianza, Bolívar, Cervantes, Colonial, Constitución, Coopseguros, Interoceánica, Latina, Olympus, Oriente, Panamericana, Rocafuerte, Sucre, Sweaden, Unidos and Vaz Seguros.
To help defray part of the cost, these insurers will be returned US$6mn from SOAT fund Fonsat, which the companies pay into and which covers victims of accidents caused by uninsured vehicles.
By Business News Americas staff reporters
* CariCRIS places financial institutions on rating watch developing - Jamaica
Caribbean ratings agency CariCRIS has placed all its rated financial institutions in Jamaica on rating watch developing, following the announcement by the country's government of a domestic debt exchange, the agency said in a statement.
The institutions on rating watch are National Commercial Bank Jamaica (NCBJ), NCB Capital Markets, Sagicor Life Jamaica and Pan Caribbean Financial Services. The latter two are the Jamaican life insurance subsidiary and financial services unit, respectively, of Barbados-based Sagicor.
The exchange offer is likely to have varying degrees of impact on the profitability, capitalization, asset quality and asset values of these institutions, and their ratings are linked to the rating of Jamaica's government, CariCRIS said.
By Business News Americas staff reporters
* IN BRIEF Feller Rate affirms Principal unit at AA - Chile
Chilean ratings agency Feller Rate has maintained its AA with a stable outlook rating on the local life insurance unit of US Principal Financial Group (NYSE: PFG), the agency said in a report.
The ratings affirmation is based on Principal Seguros de Vida's solid financial structure, conservative investment portfolio, high operating and cost efficiency capacities as well as support provided by its parent company.
The insurer mainly focuses on life annuities and had a 6.79% premium market share as of end-September.
To read the full report, in Spanish, go to this link (http://www.bnamericas.com/reports/133829.pdf)
By Business News Americas staff reporters
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In-deph interview
* Aiming to become one of the top five foreign players in the region
Fernando Concha
Latin America CEO
RSA
Regional
http://www.bnamericas.com/interviews/insurance/Fernando_Concha_,RSA,/170693727
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Main companies covered in today's news
* Sagicor Financial Corporation
http://www.bnamericas.com/company-profile/en/Sagicor_Financial_Corporation-Sagicor/170693727
* Principal Financial Group Inc.
http://www.bnamericas.com/company-profile/en/Principal_Financial_Group_Inc,-Principal/170693727
* Allianz SE
http://www.bnamericas.com/company-profile/en/Allianz_SE-Allianz/170693727
* National Comercial Bank Ja. Ltd.
http://www.bnamericas.com/company-profile/en/National_Comercial_Bank_Ja,_Ltd,-NCB_Jamaica/170693727
* Caribbean Information & Credit Rating Services Limited
http://www.bnamericas.com/company-profile/en/Caribbean_Information_*_Credit_Rating_Services_Limited-CariCris/170693727
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