Mexico s Market Evolution

(1)

Mexico’s Market Evolution

Luis J. Alvarez Marcen

March, 13th 2012

MEXICO INSURANCE DAY

(2)

2

(3)

Source:. Latinoinsurance

Insurance

Industry

in

Mexico

Historical

Penetration

&

Density

3

2.0%

1.8%

1.6%

2.7%

2.5%

2.4%

2.3%

2.2%

0

50

100

150

200

250

300

350

0.0

0.9

1.8

2.7

145

173

166 2005

2007

163 2006

125

136

193 2009

196

114 2008

166 Mexico´s premiums as % of GDP

Region premiums as % of GDP

Region premiums per capita

Mexico´s premiums per capita

(4)

Insurance

Industry

Penetration

&

Density

4,009

3,220

4,912

5.03%

4.07%

European

Union

Chile

NA

Mexico

OECD

166 7.65%

United States

1.86%

11.20%

Density (us dollar insurance spending per capita)

Penetration (premiums to GDP)

(5)

Insurance

Industry

in

Mexico

There are 101 Insurance Companies in Mexico.

20%

70%

80%

30%

2010

1990

Domestic Capital

Foreing Capital

5

Premiums

(6)

Insurance

Industry

in

Mexico

Premiums

as

%

of

GDP

6

Premiums

U

S

D Billions

Source: AMIS

(7)

NUMBER OF POLICIES AND INSURANCE CERTIFICATES,

1990-2009

Source: CNSF; Anuarios Estadísticos

The Mexican Market

0 20 40 60 80 100 120

Millions

of

Certific

at

es

Life

Health

P&C

21 103

Rate variation.

1980-1990

1.1 Times

Rate variation.

1980-2009

5.4 Times

Rate variation.

1990-2009

4.9 Times

(8)

HERFINDAHL INDEX. MEXICAN SECTORS HERFINDAHL INDEX.

INSURANCE MEXICAN SECTOR (1993-2010)

Source: EstadisticAMIS. Source: ABM 12.7 12.5 12.1 10.9 12.4 11.0 _10.6 12.4 9.1 10.1 10.0 9.1 9.0 7.8 7.0 6.9 7.0 _6.7 0 2 4 6 8 10 12 14 7,300 7,180 7,091 5,174 4,146 _3,744 3,660 2,917 _2,664 2,415 2,390 2,386 2,269 2,229 2,166 1,337 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Cemento TV Abierta Te le fonía Fija Te le fonía Móvil Electricidad Minería Tiendas Comerciales Química y… Alimentos Bebidas y Cer vezas TV por Ca ble Holding Tiendas… SEGUROS Automotriz Banca

MARKET CONCENTRATION

The Mexican Market

(9)

Insurance

Industry

in

Mexico

Premiums

USD Billions

9

16%

7%

2012

2011

42%

19 22%

19%

23%

16%

8%

46%

21 25%

22%

7%

18%

24%

19%

21%

47%

22

17 2008

18 38%

16%

41%

2010

4%

2009

14%

4%

P&C

Motor

Health

Pension

Life

Source:. AMIS

(10)

Insurance

Industry

in

Mexico

Distribution

Channels,

2010

23%

13%

14%

11%

14%

25%

10%

_14%

4%

20%

48%

Motor

Total

100%

54%

4%

27%

2%

3%

Life

39%

40%

31%

P&C

7%

Health

10%

3%

5%

21%

61%

Agents

Massive

sale

&

Others

Brokers

Bancassurance

Direct

Selling

10 Source:. AMIS 2010

(11)

11

Insurance

Industry

in

Mexico

17%

Bancassurance

Traditional

Bancassurance

Traditional

Premiums

2010

Net

Earnings

2010

16%

7%

11%

66%

P&C

Motor

Health

Life

Bancassurance

Traditional

Bancassurance

Traditional

83%

48%

52%

24%

18%

19%

39%

27%

17%

14%

43%

13%

22%

‐

1%

65%

(12)

There is a large unsatisfied demand which represents a great business

opportunity

Health

Insurance

Life

Insurance

Motor

Insurance

Only

4.5%

of

homes

insured

The

mayor

health

insurance

cover

only

5.8%

of

the

population

7.2 million

people

have

individual

life

insurance

Motor

insurance

protect

the

26.5%

of

automobiles,

since

in

Mexico

there

is

no

compulsory

insurance

* Estimates with 2010 census data and those in the SESA 2009.

INDIVIDUAL CONTRACTS REPRESENT

ONLY 2% OF THE TOTAL POPULATION.

INDIVIDUAL CONTRACTS REPRESENT

12.8% OF EMPLOYED.

Home

Insurance

12

Insurance

Industry

in

Mexico

NO HOME MORTGAGE LOANS

(13)

Cars

Insured by entity

2010

INEGI cars registered Cars Insured %

Total 32,338,820 8,350,126

25.8%

Michoacán 1,631,215 163,355

10.00%

Hidalgo 850,074 83,259

9.80%

Guerrero 714,651 62,644

8.80%

Zacatecas 504,833 39,836

7.90%

Baja California Sur 492,316 32,729

6.60%

Distrito Federal 4,166,756 2,044,742

49.10%

Nuevo León 1,975,586 956,497

48.40%

Querétaro 458,836 169,791

37.00%

Yucatán 513,792 154,343

30.00%

Chihuahua 1,207,220 345,262

28.60%

5 w/

Low %

5 w/

High

%

Insurance

Industry

in

Mexico

(14)

2000

2010

GDP

(current

million

US$)

581,426

1,034,804

GDP

per

capita

(current

US$)

5,817

9,123

Inflation,

consumer

prices

(annual

%)

9.50

4.16 Mexico´s

Profile

Source: World Bank

Economy

14

CAGR

5.9%

(15)

2000

2010

2020

*

million

%

million

%

million

%

Total

Population

_104.3

100%

112.6 100%

118.9 100%

Youth

population

(aged

less

than

15)

35 34%

32 28%

27 23%

Adult

population

(aged

more

than 15

less

than 65)

64 61%

74 66%

80 67%

Elderly

population

(aged

65 and

over)

5 5%

7 6%

12 10%

Mexico´s

Profile

Source: World Bank

* Projection Consejo Nacional de Población (CONAPO)

Population

(16)

Mexico´s

Profile

Source: INEGI

Wealth

index*

Socioeconomic Regions

9

14

11

23

13

19

11

1

4

5

8

5

6

3 %

Population

#

entities

16

____

100%

____

32

(17)

Mexico´s

Profile

E

D

D+

C

C+

AB

Source: AMAI / NIELSEN 2008 17

Households Income Distribution

Percentaje

Household income

_per

_month

7.2%

+

6,538

usd

14.0%

2,692

‐

6,538

usd

17.9%

893 ‐

2,692

usd

35.8%

524 ‐

892 usd

18.3%

209 ‐

523 usd

6.7%

0 ‐

208 usd

Population

8.1

15.8

20.2

40.3

20.6

7.5 Millions

100%

112.6

(18)

Mexico´s

Profile

Source: INEGI 2009 18

Size of

companies

Micro

(1

‐

10 employees)

4.8 millions =

95%

Small

(11

‐

50 employees)

0.22 millions =

4.5%

Medium

&

Big

(+51

employees)

0.03 millions =

0.5%

(19)

Banking

Domestic

credit

provided

by

banking

sector

(%

of

GDP)

45

71

90

98

132

146

160

204

231 Brasil

Chile

Asia

Latin

America

China

North

America

Mexico

European

Union

OCDE

(20)

2.2%

2.5%

1.8

1.9

2.0

2.1

2.2

2.3

2.4

2.5 2011

2012

2013

2014

2015

2016

20

Trend

Insurance

Industry

in

Mexico

Market

Development

Premiums

as

%

of

GDP

Strategic Plan

CAGR

7%

(21)

PRIMAS DIRECTAS POR OPERACIONES

(MILLONES DE PESOS) 0 25,000 50,000 75,000 100,000

Life Pensions Health Automóbile Property &

Casualty DIC – 11 107,873 15,749 41,354 55,829 50,137 270,942 DIC - 10 95,589 15,849 37,213 50,060 39,679 238,389 NET INCREMENT 12,284 (100) 4,141 5,769 10,458 32,553 % GROWTH _12.9 _(0.6) _11.1 _11.5 _26.4 _13.7 280,000 TOTAL 150,000 PEMEX CONCILIATION 47,478 268,283 43,310 242,020 4,168 26,263 9.6 10.9 Dñ S/A TOTAL

IN REAL TERMS, THE MARKET GREW AT A RATE OF 9.5%

(22)

MARKET SHARE BY LINE OF BUSINESS

2011 FIGURES

VIDA

39.8%

PENSIONS

5.8%

HEALTH

15.3%

AUTOS

20.6%

DAÑOS SIN

AUTOS

18.5%

LIFE AND HEALTH 164,977

(23)

ESTADO 338,036 PRIVADAS 100,775 RTA VARIABLE 58,975 10% INMOB 9,783 1% OTROS 46,852 8% PTAMOS 21,127 4% RENTA FIJA. 438.811 75% VAL. EXTR. 10,505 2% RTA VARIABLE 54,628 11% INMOB 10,250 1% OTROS 42,666 8% PTAMOS. 14,197 3% RTA. FIJA 377,287 74% VAL. EXTR. 12,932 3%

INVESTMENTS

(MILLIONS OF PESOS)

DICIEMBRE 2011 586,052 MP INCR. 14.5%

INCR. 16.3%

1.03 times the reserves

ESTADO 290,599 PRIVADAS

86,688

(24)

TRADICIONALES 367,722 74.5%

TECHNICAL RESERVES

DECEMBER 2010

GROWTH

15.7%

569,714 MP

492,438 MP

13.5% 16.5%

DECEMBRR 2011

PENSIONS 125,627 25.5% TRADITIONALS 366,811 74.5 % PENSIONS 142.559 25.0% TRADITIONALS 427,155 75.0 %