This geographical segment of the marketplace is expected to maintain its fast increases, despite industry challenges.
According to a recent statement that was made by Alan Murray, senior vice president at Moody’s, Latin America will continue to be one of the most rapidly growing insurance market regions on the globe.
This, despite the fact that the insurance industry is expected to have to face certain hurdles along the way.
Over the last ten years, Latin America has continued to hold the top spot as the most rapidly growing insurance market, having outpaced all other emerging regions, such as Asia, as well as having surpassed the growth seen in developed countries. Throughout the last decade, the region’s annual growth has come to a level of nearly 15 percent. Countries in which growth has been particularly strong include Brazil, Columbia, and Argentina.
Among the driving forces behind the growing insurance market in the region has been the expansion of the middle class.
A report from Moody’s identified a growing middle class population as a driver behind the rise in the insurance industry’s performance in this region, as more people are seeing improvements in savings, earnings, and consumption.
While economic growth has been experiencing a slowing in Latin America, there is a chance that this could cause income levels to plateau among the middle class throughout the region. The Moody’s report pointed out that this could cause the insurance sector to be held back from its current pace.
That said, Murray stated that if that market’s growth does slow down, the positive gap that exists in the growth of that sector relative to other markets is not likely to continue at its current degree.
However, as the expansion of a strong middle class throughout the area has brought with it the development of the capital market, as well as better corporate governance and regulation of the insurance market. Latin America, as a marketplace that is currently developing, is forecasted to experience faster growth rates than economies that have reached greater maturity. What “remains to be seen,” said Murray, is whether or not it will be able to hold its higher rate than Asia.