(1888PressRelease)
June 01, 2009 - Eduardo Mareovich, chief executive of Zurich Mexico, said in an interview the company's new mass market business could generate premiums of well over $100 million during the next five years.
"We want to have a volume in premiums of $13 million in our first year in the market," he said.
Zurich Mexico will sell basic life, health and property and casualty insurance policies through distribution alliances with third parties, including banks, hotels, and employers.
Zurich operates in Mexico through two companies - property and casualty insurer Zurich Compania de Seguros and life insurer Zurich Vida Compania de Seguros - that together had a 2.2% market share with 4.52 billion pesos ($341.4 million) in direct premiums last year, according to regulator CNSF.
Mexico is an attractive market for insurance companies given the country's young population, growing middle class, and relatively low use of financial services.
Insurance premiums as a percentage of gross domestic product stood at just 2% in 2007, compared to 3.5% in Chile, 3% in Brazil and 2.6% for the Latin America and Caribbean region as a whole, according to the latest data from global reinsurance giant Swiss Re.
"We believe that Mexico's insurance industry could double [in size] in the next five to seven years," Mareovich said. "It's going to grow in the areas where people from the lower class are entering the middle class or where the middle class enters the upper class."
That growth potential has led to several deals in recent years by foreign insurers looking for a piece of the Mexican market.
Paris-based AXA SA (AXA) acquired ING Groep NV's (ING) Mexican insurance business for $1.5 billion last year. Australia's QBE Insurance Group Ltd. (QBE.AU) bought Cumbre Seguros the previous year for an undisclosed sum, while Aegon NV (AEG) purchased a 49% stake in life insurer Seguros Argos in 2006.
Mareovich said there is still room for more deals in Mexico and that Zurich is open to acquisitions.
"The group considers Mexico to be a strategic market where we want to grow in an aggressive way. That means if at some point the opportunity were to come up, and the marriage of companies makes sense, we wouldn't rule out growing inorganically," he said.
The Swiss insurance company expanded its presence in Latin America last year with the acquisition of two insurance companies in Brazil for about $179 million.
http://www.zurich.com/
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