Page 272 - Evento Guatemala 2012

When they were divided into three large groups, local companies, i.e., Latin American companies
based in only one country, accounted for almost 60% of premiums; regional companies, i.e.,
Latin American companies expanding beyond their borders, accounted for close to 7%; and
global companies accounted for the remaining 33% or 34%. In other words, this was a market
still dominated by Latin American companies in general.

Conclusions

From the data shown, we can draw the following conclusions:

• Surety bond premiums at December 2011 totaled USD 2.1 billion with 22% premium
growth in that currency compared to 2010. The other lines in the region showed almost the
same premium growth.

• The countries with the highest premium growth in this period were: Argentina, 44%; Chile,
41%, and Paraguay, 31%.

• Surety bonds represented 1% of the regional insurance portfolio, and this percentage had
been somewhat stable since 2005. The countries with a higher percentage of premiums were:
Panama, 11.3%; Ecuador, 7%; and Colombia, 4.9%. Surety bond premiums accounted for
0.23% of public expenditure.

• Local insurers concentrated 59% of the market; global companies, 34%, and regional
companies, 7%.

• Brazil (23%), Mexico (22%), Colombia (17%), Argentina (11%) and Venezuela (9%) were
the most important countries in this line and underwrote 82% of premiums.

• About 372 insurance groups were operating, and we call them groups because the result was
obtained by adding the branches owned by the same company. The average result was of
about USD 5.8 million per group, per year.

• The loss ratio declined, which is something positive, and the combined ratio decreased as
well, both on a year and a quarterly trend basis.

Analysis per country

Now I will look at each of the largest Latin American countries.

Brazil

In Brazil, as well as in the rest of the countries, two growth lines are shown: the full one, which
represents premium growth in US dollars, and the dotted one, in local currency. When the
full line is above the dotted one–as in 2010 and 2011–, it means that the currency appreciated,
which indicates that the US dollar depreciated against the local currency. We can see this in
Brazil in 2011: 18% premium growth in local currency, which represented 24% premium
growth in US dollars.

270 Asociación Panamericana de Fianzas / Panamerican Surety Association