The insurance industry is still trying to recover from the ravages of the recession, hyperinflation, company closures and migration. The president of the union, María del Carmen Bouffard, highlighted that today more Venezuelans insure their family after the covid-19 pandemic, but that still only 5% of the population has a policy. On the other hand, figures from the Superintendency highlight that 10 companies dominate 85% of the market
The president of the Chamber of Insurers of Venezuela, María del Carmen Bouffard, said that in the last eight years the sector lost between 60% and 70% of its clients due to various factors that equally affected the rest of the economy. She stressed that the economic context affected this market because the Venezuelans lost their purchasing power, which is why they have prioritized food and medicine.
«The insurance has remained after you have your basic needs covered. This caused the sector to lose an important client portfolio, we can be talking about 60% to 70%. Among the factors, those who emigrated from Venezuela, companies that closed or reduced the number of employees, which sometimes also had benefits such as group policies, “he said.
The reduction of the Venezuelan insurance sector since 2015 is evident in the numbers of this market. According to figures from the Superintendence of Insurance Activity (Sudeaseg) corresponding to April of this year, it stands out that the balance of operations closed at 6.5 million dollars; while in the same month eight years ago it was $261.5 million.
The results indicate that in relation to the net premiums collected, the market is now more fragmented in few insurers. According to official data, in April 2023 they ended at Bs 5,798 million and of this total, 10 companies out of 50 hold 85% of the market with Bs 4,938 million. This percentage is higher than in 2015 when the first 10 companies out of 48 in the ranking dominated 68.7% of the market.
In the last report of the sudeasegThe companies in the country that lead the market are Mercantil Seguros, Seguros Caracas, Pirámide, Mapfre, La Internacional de Seguros, Seguros Constitución, Oceánica de Seguros, Hispana, Banesco and Real Seguros.
Bouffard pointed out -in addition- that 71% of the insurance portfolio is made up of health insurance, while 6.5% are vehicle insurance, “which in 2010 reached 35%.” While in the case of combined, residential, industrial or commercial insurance they only represent 4%. Fire insurance stands at 1.99% and miscellaneous insurance at 3.45% of the latter.
“There is a total imbalance because that also indicates that people are not insuring themselves in areas such as cars, homes, businesses, industries,” he said.
He stressed that in recent years, after the covid-19 pandemic, there has been a slight increase in Venezuelans interested in hiring health insurance for their family. However, only 5% of the population has some type of insurance and, for the most part, it is health.
Calculations made by the Chamber of Insurers indicate that in 2022 $363 million were disbursed for claims coverage in various branches. Of that amount, 91% corresponded to the attention of claims in the health branch.
While 5% of the total, equivalent to $18.7 million, was allocated to coverage of claims in the automobile insurance branch, and the remaining percentage (4%) was distributed in claims in other branches.
For the year 2022, the premiums collected reached an approximate amount of $720 million, taking this figure into account, claims paid equal 50% of premiums collected.
María del Carmen Bouffard, president of the Chamber of Insurers of Venezuela.
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New scale
The Chamber of Insurers of Venezuela and the Association of Clinics and Hospitals resumed the technical tables to define a referential scale for the health sector, which “has been working on since the end of last year” and hopes that it will become “help and benefit for our policyholders,” said María from Carmen Bouffard.
«We seek to reach a referential scale that serves as a tool that benefits the insured. With these technical tables, it is sought to advance as soon as possible and reach a good port with the endorsement of Sudeaseg », he indicated.
The issue of a scale, which is a calculation list that evaluates prices in private health establishments in the national territory, has been discussed repeatedly in the country. However, no agreement could be reached on this matter.
Bouffard also stressed that another factor that has affected the sector is that of companies that offer health policies without being authorized. In the last list issued by Sudeaseg there were around 24 or 25 companies that sell insurance products illegally.
“They are all marketing insurance products here in Venezuela without being duly authorized, without complying with capital regulations, contracts, the forms of contracts and rate approval, among others. They are established outside the country and when people emigrate they are surprised because it does not work for them, and they are unaware that they must live in Venezuela to be able to use the policy,” he said.
He stressed that it is important that community learn about insurance culture. “That should be part of the day to day, of the importance of being protected, of having a prevention of the risks to which we are all subjected.”
Regarding the reform of the Insurance Activity Law, which was already sanctioned in October 2022 by the National Assembly in 2020, Bouffard indicated that they are waiting for its execution and that “obviously it will bring important challenges for the sector throughout level, operational level, technological level. We are talking about new figures such as financial technology, business lines such as microinsurance, inclusive insurance, mass insurance, alternate channels, among others.
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