Environmental, social and governance issues are a growing focus in Mexico, particularly social inclusion and transparency, followed by other governance and environmental matters. The financial sector has taken a leadership role in this space by pursuing voluntary initiatives to bolster anti-corruption efforts and encourage the adoption of ethics codes in the sectors in which it operates. It also…
Reaching lower-income segments of the population is notoriously challenging for insurers. In a country such as Mexico, where almost half of the 129.5m-strong population lives below the poverty line and the insurance culture is still underdeveloped, this is particularly difficult. As a result, Mexico has become a leading developer of micro-insurance plans, which are tailored to customers with limited…
After several years of innovation – notably the advent of new investment vehicles and the arrival of a second bourse – alongside the change in government at the end of 2018, the coming years are likely to be characterised by consolidation. Domestically, uncertainty around sectoral policies – specifically in energy, infrastructure and banking – of the administration of President Andrés Manuel…
Chastened by a credit boom and bust during the first half of the 1990s, the authorities have reformed, liberalised and privatised the banking sector while ensuring strong regulatory oversight and, in turn, relatively conservative lending practices. This explains, in part, the small size of the sector as well as the low levels of financial inclusion across the country. While the banking sector serves…
Although the sector’s medium-term growth is likely to be impeded by weak economic conditions, the Mexican Association of Insurance Companies forecast that total premium would rise by 3.4% in 2019, though downgrades have been made in subsequent forecasts. This is likely to weigh most heavily on the non-life segment due to the impact of fiscal austerity on government spending. The life segment, meanwhile,…
Interview:Alejandro Díaz de León What internal and external factors contributed to Mexico’s economic slowdown, and what monetary policies can counterbalance their effects? ALEJANDRO DÍAZ DE LEÓN: The latest growth forecast from Banco de México (Banxico) estimates GDP growth to range between 0.2% and 0.7% for 2019, and between 1.5% and 2.5% in 2020. The forecast for 2019 reflects, in…
Interview:José-Oriol Bosch Par What strategies are being employed to increase foreign investment and financial inclusion? JOSÉ-ORIOL BOSCH: In January 2019 the government signed a decree that aims to boost the stock market and financial institutions for the benefit of entrepreneurs. The decree is focused on bringing young people into the financial services sector, encouraging share listing…
Interview:Mario Vela Berrondo How would you characterise the strength and resilience of the insurance industry in the face of external and internal economic challenges? MARIO VELA: Both the insurance industry and the broader economy have faced a number of challenges in recent years. However, the implementation of new initiatives, such as the Solvency II regulatory standards, has helped insurance…
Interview:Carlos Serrano What regulatory measures need to be taken to boost competitiveness, ease access to credit and spur socio-economic growth? CARLOS SERRANO: Mexico has a strong regulatory framework, especially with regard to prudential regulation, which has enabled the continued expansion of credit, robust capital and liquidity positions, as well as the entry of new agents. Nevertheless,…
Two of the biggest trends in global insurance in recent years are premium growth in emerging markets and the rising importance of technology across the supply chain. The latter has come to be referred to as insurtech, a potentially disruptive trend that heralds both threats to and opportunities for incumbents and newcomers alike. While technological solutions are being applied along the length of the…
