MEXICO INSURANCE DAY OPPORTUNITIES PANEL Mexico s Market Evolution Luis J. Alvarez Marcen March, 13th 2012
Mexico s Market Evolution 2
Insurance Industry in Mexico Historical Penetration & Density 2.7% USD 350 2.5% 2.7 % 2.4% 2.3% 300 2.2% 2.0% 250 1.8% 1.8% 1.6% 1.6% 1.8 200 150 100 50 145 125 136 114 166 163 173 193 166 196 0.9 0 2005 2006 2007 2008 2009 0.0 Mexico s premiums per capita Region premiums per capita Mexico s premiums as % of GDP Region premiums as % of GDP Source:. Latinoinsurance 3
Insurance Industry Penetration & Density 4,912 4,009 3,220 11.20% 7.65% 5.03% 4.07% NA 1.86% 166 United States OECD European Union Chile Mexico Penetration (premiums to GDP) Density (us dollar insurance spending per capita) Source: Organization of Economic Co-Operation and Development (OECD) 2010 4
Insurance Industry in Mexico There are 101 Insurance Companies in Mexico. 30% Domestic Capital Foreing Capital 80% 70% 20% 1990 Premiums 2010 5
Insurance Industry in Mexico Premiums as % of GDP Premiums USD Billions Source: AMIS 6
The Mexican Market NUMBER OF POLICIES AND INSURANCE CERTIFICATES, 1990-2009 Rate variation. 1980-1990 1.1 Times Rate variation. 1990-2009 4.9 Times Rate variation. 1980-2009 5.4 Times Millions of Certificates 120 100 80 60 40 21 Life Health P&C 103 20 0 Source: CNSF; Anuarios Estadísticos
The Mexican Market MARKET CONCENTRATION HERFINDAHL INDEX. INSURANCE MEXICAN SECTOR (1993-2010) 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 14 12 10 8 6 4 2 0 Source: ABM Source: EstadisticAMIS. HERFINDAHL INDEX. MEXICAN SECTORS 5,174 4,146 3,744 3,660 2,917 2,664 2,415 2,390 2,386 7,300 7,180 7,091 2,269 2,229 2,166 1,337 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Tiendas SEGUROS Automotriz Banca Cemento TV Abierta Telefonía Fija Telefonía Móvil Electricidad Minería Tiendas Comerciales Química y Alimentos Bebidas y Cervezas TV por Cable Holding
Insurance Industry in Mexico Premiums USD Billions 18 23% 16% 16% 4% 17 19% 19% 14% 4% 19 22% 18% 16% 7% 22 25% 22% 18% 7% 21 24% 21% 19% 8% Motor P&C Health Pension Life 41% 38% 42% 47% 46% 2008 2009 2010 2011 2012 Source:. AMIS 9
Insurance Industry in Mexico Distribution Channels, 2010 100% 61% 54% 31% 40% 48% Agents Brokers Direct Selling Bancassurance 7% 39% 27% 20% Massive sale & Others 21% 11% 3% 5% 14% 10% 23% 25% 13% 3% 2% 4% 10% 14% 14% 4% Health Life P&C Motor Total Source:. AMIS 2010 10
Insurance Industry in Mexico Premiums 2010 Net Earnings 2010 Bancassurance 17% Bancassurance 52% Traditional 83% Traditional 48% Bancassurance Traditional Bancassurance Traditional 66% 16% 7% 11% 24% 39% 18% 19% 43% 27% 17% 14% 65% 13% 22% 1% Motor Health P&C Life 11
Insurance Industry in Mexico There is a large unsatisfied demand which represents a great business opportunity Home Insurance 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 NO HOME MORTGAGE LOANS ASSOCIATED INDIVIDUAL CONTRACTS REPRESENT ONLY 2% OF THE TOTAL POPULATION. INDIVIDUAL CONTRACTS REPRESENT 12.8% OF EMPLOYED. * Estimates with 2010 census data and those in the SESA 2009. 12
Insurance Industry in Mexico 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% 5 w/ Low % 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% 5 w/ High % 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% 13
Mexico s Profile Economy 2000 2010 CAGR GDP (current million US$) 581,426 1,034,804 GDP per capita (current US$) 5,817 9,123 5.9% 4.6% Inflation, consumer prices (annual %) 9.50 4.16 Source: World Bank 14
Mexico s Profile Population 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% Source: World Bank * Projection Consejo Nacional de Población (CONAPO) 15
Mexico s Profile Socioeconomic Regions Wealth index* % Population 9 14 11 23 13 19 11 100% # entities 1 4 5 8 5 6 3 32 * Index considers: education, health, employment, housing, infraestructure Source: INEGI 16
Mexico s Profile Households Income Distribution Population Millions Percentaje Household income per month AB 8.1 7.2% + 6,538 usd C+ C 15.8 20.2 14.0% 2,692 6,538 usd 17.9% 893 2,692 usd D+ 40.3 35.8% 524 892 usd D E 20.6 7.5 112.6 18.3% 209 523 usd 6.7% 0 208 usd 100% Source: AMAI / NIELSEN 2008 17
Mexico s Profile Size of companies Small (11 50 employees) 0.22 millions = 4.5% Medium & Big (+51 employees) 0.03 millions = 0.5% Micro (1 10 employees) 4.8 millions = 95% Source: INEGI 2009 18
Banking Domestic credit provided by banking sector (% of GDP) 231 204 160 146 132 98 90 71 45 North America OCDE European Union China Asia Brasil Chile Latin America Mexico Source: International Monetary Fund (IMF) 2010 19
Insurance Industry in Mexico Market Development Premiums as % of GDP 2.5 2.4 2.3 Strategic Plan CAGR 9% 2.5% 2.2% 2.2 2.1 2.0 Trend CAGR 7% 1.9 1.8 2011 2012 2013 2014 2015 2016 20
PRIMAS DIRECTAS POR OPERACIONES (MILLONES DE PESOS) 280,000 150,000 100,000 75,000 50,000 25,000 0 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 TOTAL 12,284 (100) 4,141 5,769 10,458 32,553 % GROWTH 12.9 (0.6) 11.1 11.5 26.4 13.7 PEMEX CONCILIATION Dñ S/A TOTAL 47,478 268,283 43,310 242,020 4,168 26,263 9.6 10.9 IN REAL TERMS, THE MARKET GREW AT A RATE OF 9.5% And WITH PEMEX CONCILIATION 6.8%
MARKET SHARE BY LINE OF BUSINESS 2011 FIGURES DAÑOS SIN AUTOS 18.5% VIDA 39.8% AUTOS 20.6% HEALTH 15.3% PENSIONS 5.8% LIFE AND HEALTH 164,977 60.9%
INVESTMENTS (MILLIONS OF PESOS) DICIEMBRE 2011 586,052 MP INCR. 14.5% PRIVADAS 100,775 VAL. EXTR. 10,505 2% RTA VARIABLE 58,975 10% INMOB 9,783 1% OTROS 46,852 8% 1.03 times the reserves INCR. 16.3% ESTADO 338,036 RENTA FIJA. 438.811 75% PTAMOS 21,127 4% DICIEMBRE 2010 511,960 MP PRIVADAS 86,688 ESTADO 290,599 RTA. FIJA 377,287 74% VAL. EXTR. 12,932 3% RTA VARIABLE 54,628 11% INMOB 10,250 1% OTROS 42,666 8% PTAMOS. 14,197 3%
TECHNICAL RESERVES DECEMBRR 2011 DECEMBER 2010 PENSIONS PENSIONS 142.559 13.5% 125,627 25.5% 25.0% TRADICIONALES 367,722 TRADITIONALS 16.5% TRADITIONALS 74.5% 366,811 427,155 74.5 % 75.0 % GROWTH 569,714 MP 492,438 MP 15.7%
Mexican Association of Insurance Institutions Strategic Plan Life Life and Disability / Social Security Tax Incentives Individual Retirement Plans Pensions National Pension System Annuities Motor Compulsory Insurance Property & Casualty Compulsory insurance Catastrophe insurance Health National Health System 25
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Mexico s Market Evolution Luis J. Alvarez Marcen March 13th, 2012 27