Page 266 - Evento Guatemala 2012

What about the loss ratio and the underwriting results? Here we have added a piece of data we
did not have last year, which is the gross loss ratio represented by the grey line.

The light grey bar stands for the insurance companies’ net loss ratio. In the last three years the
net loss ratio showed a downward trend, decreasing from 25% to 19%. As a result of the lower
loss ratio, the underwriting results escalated from 30% to 33%. The insurers’ total underwriting
increased to 17% in 2010 and then dropped to 14% in 2011.

Surety bonds in Latin America: net and gross ratios, and underwriting results

40%

35% 34% 32% 34% 29% 30% 30% 33%
26% 23% 25% 22% 21% 19%
30%

26%

25%
20% 26%

15% 13% 14% 16% 17%
10% 16%
14%

5%

0% 2007 2008 2009 2010 2011*
2005 2006
Underwriting Results / Total Premiums Gross Loss Ratio
Earned Premium Loss Ratio

*Figures at December 2011, except for El Salvador and Uruguay (at September 2011, 12 months), Paraguay (at June 2011), Dominican Republic
and Puerto Rico (at December 2010) and Venezuela (projection at December 2011).
Fidelity not included.
Argentina: fiscal year at June.
Underwriting results: income less underwriting cost, administrative expenses excluded.
Gross loss ratio: Argentina, figures since 2009; Bolivia, since 2008; Paraguay, since 2007.

I thought it would be interesting to compare the gross and net loss ratios of each country.
An arrow points to the countries where I understand surety bonds were on demand: Bolivia,
Ecuador and Peru.

The results were different, i.e., it was not because of on-demand bonds that these countries
had a higher gross or net loss ratio, except for Bolivia, where something must have happened
in 2011 to have such a high figure. Conversely, in Ecuador and Peru the figures were quite low,
close to the region’s average.

264 Asociación Panamericana de Fianzas / Panamerican Surety Association