Chilean Insurance Industry, Latin America Economic Performance - Ken Research
by Ashish Kumar Market ResearcherThe report titled “Economic Liberalization
in Latin America-How is it Affecting Insurance?”, provides a comprehensive
analysis of economic liberalization in Latin American regions. This report
covers what is economic liberalization, effects of economic liberalization,
effect of economic liberalization in Latin American regions, economic
liberalization affecting insurance and future effects of economic
liberalization.
What Is Economic
Liberalization:
Establishing opportunities with the rest of the world with respect to trade,
regulations, taxation and other sectors which affects the business in the
country is termed as “Economic Liberalization”. With steady economic growth
within a country it is easy to estimate the level a country is liberalized
economically and how easy it is to invest and do business in the country.
Almost all the developed countries experienced liberalization process and the
emerging countries are yet to experience it.
Investments in the emerging
countries may hamper due to few barriers such as tax laws, foreign investment
restrictions, and legal issues and accounting regulations, all of which make it
difficult or impossible to gain access to the country. Therefore, economic
liberalization process relaxes such barriers and relinquishing some control
over the direction of the economy to the private sector. This trend often
involves some form of deregulation and privatization of companies in the
emerging countries. The main goal of economic liberalization is the free flow
of capital between nations and the efficient allocation of resources. It is
usually involves reduction of tariffs, trade laws and other trade barriers.
When a country is liberalized, stock market values also rise. Majority of the
fund managers and investors are interested in lookout for new opportunities for
profits. Therefore, a huge investment in the emerging countries leads to a flow
of capital. Economic liberalization reduces the political risks to investors.
Economic Liberalization
Affecting Insurance: Latin America is an attractive and profitable region for global
insurers who are facing a sluggish growth.
Latin America has low insurance penetration and therefore, has a
capacity for strong growth in income per capital which is the key asset for
insurers. The political and economic conditions vary and overall the region has
a bright outlook. Latin America is a region with the combination of rising
incomes, rising penetration and large offshore energy-related projects which
will strengthen the demand for personal and commercial non-life insurance products.
Brazil accounts for a major share
in the insurance market in Latin America. Majority of the insurance companies
utilize advanced technologies such as digital transformation to drive
efficiency, improve profitability and increase penetration. Majority of the
insurance companies are able to maintain marginal profitability despite the
economic downturn in Latin America and this trend is expected to continue in
the near future. Brazil is making structural reforms after emerging from severe
recession. Few regulatory reforms are setting a new insurance compliance agenda
and bolstering capital adequacy requirements which will increase the insurance
industry's long-term financial stability. Agricultural insurance in Latin
America is undeveloped because the majority of the farmers are categorized as
unprotected and underserved by traditional insurance markets. Latin America has
witnessed a major transformation in the past two years. With the increase in
global liquidity tightening more gradual and a reversal in US dollar strength
has supported the economic recovery in many regions.
Although the economy is improving
in Latin America, there is still a disappointing rate of growth in business
environments. Major reforms are needed to simplify costly and complex tax
systems in the region, while broadening the tax base which remains over-reliant
on indirect taxes. Liberalisation is required to improve competition in the
goods and services markets, and increasing the flexibility of labour markets.
Underdeveloped infrastructure is a major factor to achieve sustained economic
growth. There is increase in private investment in financing infrastructure
with the upgrading of the regulatory frameworks for public-private partnerships
(PPPs) and by removing restrictions on private investment in few areas.
Future Effects of Economic
Liberalization:
The underlying goal of economic liberalization is to have witness an
unrestricted capital flowing into and out of the country to boost growth and
efficiencies within the home country. After a tough period of economic slowdown
in Latin American region, it was expected that the upcoming year will witness a
recovery. Brazil and Argentina are recovering from recession and the regional
economy as a whole is starting anew. A steady growth is expected to stabilise
the economy of the Latin America region for the next few years.
Key Topics Covered in the
Report:
Latin America Insurance Industry
Market Research
Latin America Market Size
Latin America Economic Performance
Brazil Insurance Industry Market
Research
Reinsurance Market Research Report
Latin America
Latin America Insurance Industry
Competition
Insurance Markets in Argentina
Mexico Insurance Industry Market
Research
Latin America Insurance Industry
Regulations
Latin America Insurance Industry
Future Outlook
Uruguayan Insurance Industry
Ecuadorian Insurance Industry
Colombian Insurance Industry
Peruvian Insurance Industry
Chilean Insurance Industry
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Ken Research
Ankur Gupta, Head Marketing &
Communications
+91-124-4230204
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Created on Feb 5th 2018 03:31. Viewed 304 times.