< ALACRA META ABSTRACT>BMI View: Growth in the Chilean insurance sector will, like the rest of the economy, be highly determined by revenue from the country s main commodity export, copper. Although the economy is diversifying, there are clear trends showing the correlation between the copper industry and volumes of premiums written. ...Nevertheless, the growth of these sectors may open up opportunities for partnerships and mergers with smaller local players. Looking ahead, in US dollar terms, both life and non-life premiums are looking to grow at an average annual pace of over -- each year between ---- and ----, a robust figure that we believe will deliver significant opportunities. The life and non-life markets are mature and include several leading multinational firms as well as indigenous providers, meaning opportunities for new entrants will be more limited than they are in other markets in the region. ...Looking ahead, in US dollar terms, both life and non-life premiums are looking to grow at an average annual pace of over -- each year between ---- and ----, a robust figure that we believe will deliver significant opportunities.
...The life insurance sector has proven to be resilient to economic weakness. However, the market is mature, having grown in line with social development and economic mobility. ...Allowing for exchange rate changes, in US dollar terms GWP will decline by -.- to USD-.-bn; a significant reduction from the previous quarter when we forecast -.- growth to USD-.-bn. In December ----, assets managed by life insurance companies reached USD--.-bn and annuities premium income totalled USD-.-bn, representing about -.- of the country s GDP and -- of the total insurance industry s premium, according to Fitch Ratings. Social security/annuity products account for the bulk of the market, but disability and survival insurance, mortgage life insurance, health insurance, traditional life insurance and universal life/index life are also popular. In the medium term, we forecast life premiums to grow to USD--.-bn in ----. Looking forward, we expect life premiums to remain at -.- of GDP by end of ----, following the GDP trend very closely.
...However, this is a downwards revision from the USD---.- per capita forecast in the previous quarter, reflecting lower rates of GDP growth. The main driver of the growth will likely be the expansion of household income. In particular, we see significant expansion in the country s high-income demographic, with the number of households earning between USD--,--- and USD--,--- a year set to grow from ---,--- in ---- to ---,--- in ----. Correspondingly, the number of families with annual incomes of below USD--,--- will fall considerably. ...
