[October 08, 2015]

A.M. BestTV: Mexico Could See Increased Reinsurance Demand

This fourth in a series of "First Monday" episodes spotlights A.M. Best América Latina Director of Analytics Alfonso Novelo's discussing how Mexico's new Solvency II- like regulations could lead insurers concentrated in certain lines of business to seek out capital relief through reinsurance. Click on http://www.ambest.com/v.asp?v=mexicoreinsure1015 to view the entire program.

"First Monday" is A.M. Best's monthly program featuring commentary by the company's leading analysts.

The insurance market in Mexico is the second largest in Latin America after Brazil; thus, presenting opportunities for reinsurers operating in Mexico. In recent years, Mexico's regulator has increased monitoring of the sector as well as the country's new risk-based solvency regime that is modeled after Solvency II.

"A.M. Best does not expect major changes to reinsurance buying with the implementation of Solvency II- like regulations," said Novelo. "However, companies that are concentrated in certain lines of business that are more capital intensive, these companies might face some pressure regarding the implementation of the new solvency requirements."

"In addition, A.M. Best believes catastrophe modeling practices in Mexico are adequate," continued Novelo. "That there is enough room for other catastrophe model suppliers to enter the markets. Also, in terms of the rating process, those companies that take a look into different catastrophe models when assessing their probable maximum losses will have better risk management practices. A.M. Best does not see any growth in catastrophic exposures in Mexico."

Recent episodes of ^A.M.BestTV include:

• U.S. Title Sector in Flux Amid New Rules, Bumpy Housing Market: A.M. Best Senior Economist Meg Mulry and Senior Financial Analyst Neil Das Gupta discuss the state of the U.S. housing market and how new disclosure practices will impact title insurers: http://www.ambest.com/v.asp?v=fmtitle1015.
• Sharing the Ride and Sharing the Risk: A.M. Best Senior Financial Analyst Michael Venezia explaining how growth in ride-sharing services, such as, Uber and Lyit, has the insurance industry contemplating exposures: http://www.ambest.com/v.asp?v=uber1015.
• Consolidation Expected With New Mexico Regulations: A.M. Best América Latina Managing Director Manuel Calderón and Director of Analytics Alfonso Novelo's discussion on implementation of new Solvency II-like rules in Mexico and their likely impact: http://www.ambest.com/v.asp?v=mexicorules1015.
• Crowd-Sourcing Startups Aim to Return Insurance to Its Roots: Peer-to-peer insurance startups are melding technology, social media and early insurance models to cover members: http://www.ambest.com/v.asp?v=crowdsource1015.