Mexico’s general insurance industry is expected to reach a gross written premium (GWP) of US$20 billion by 2025 according to data analyst GlobalData.
The analyst says that it forecasts a compound annual growth rate (CAGR) of 6.2 per cent, rising from a GWP of $15.4 billion in 2020.
Prasanth Katam, Insurance Analyst at GlobalData, commented: “This growth is dependent on Mexico's economic recovery, which is currently seeing a strong revival with growth of 6.1 per cent forecast by the end of 2021 – after contracting by 8.2 per cent in 2020 due to the Covid-19 pandemic. With a fast recovery comes a boost for the general insurance industry, which is expected to bounce back in 2021 with 3.3 per cent growth.”
Awareness and digital solutions drive growth in the accident and health insurance sector
As part of the overall rise of the general insurance market in 2020, GlobalData said that the personal accident and health insurance (PAH) sector is also expected to grow at a CAGR of 8.9 per cent until 2025.
The PAH sector constitutes Mexico’s second-largest segment for general insurance, with a GWP share of 30.9 per cent in 2020.
Growth in the sector will be driven by increased awareness of health insurance products due to the pandemic – the PAH sector registered growth of 10.7 per cent in 2020 – and an increasing focus by insurers on new digital services.
Since the pandemic, demand for telehealth and online consultation has driven many insurers to design more products focused on preventative medicine. Insurers have increasingly adopted technologies intended to provide a more customised service to clients.
Other beneficiaries of general insurance market growth include the property and car insurance sectors, which are forecast to grow by a CAGR of 6.6 per cent and 2.6 per cent during the 2020-2025 period respectively.