Gerardo Garcia, President & CEO, Barents Re Reinsurance Company, Inc

Gerardo García, CEO and Chairman of Barents Re Reinsurance Company, Inc., analyzes the consequences in the insurance market after the natural disasters that affected the Latin American region in 2017, specifically Mexico and Puerto Rico, two nations that were severely affected.

Gerardo García puts some statistics in context.

The earthquake that had its epicenter in Puebla on September 19, 2017 left more than 370 fatal victims, approximately 6,000 injured and more than 16,449 million Mexican pesos in claims to insurance companies. For its part, Hurricane Maria affected a large number of cities in the Caribbean in the same month of September 2017, leaving more than 2,000 fatalities and claims amounting to $ 72,000 million (USD) in insured losses.
At the end of these catastrophes, government authorities reported an exponential increase in requests for the issuance of non-life insurance policies. Faced with this situation and in conjunction with the multimillion-dollar insured losses, the insurance market anticipated a considerable increase in premium prices for this type of coverage.

Gerardo García comments on the consequences he had in the market.

However, more than 1 year after the facts, the reality is that the value of the premiums has not increased, but has remained below the technical limits; this has caused that the market in Latin America is distorted, the capacities have remained constant without price sensitivity. Remember that property insurance policies are exposed to severity and not to the frequency of claims.

The market for property insurance coverage in Latin America has not been self-corrected after the occurrence of these claims. The next 3 years for this niche sector in Latin America will have a negative outlook.