Chile Insurance Sector 2010 Claims and opportunities to adjusters

By Bernardo Javalquinto, Economist

October 05, 2010

This analysis is solely the work of the author. It has not been edited or endorsed by GLG.

Summary

The immature sector presents a high level of claims that are due to the lack control of the insurance operators and due to de lack of public adjusters that do not exist in the country. More and better insurance companies have a great opportunity to balance the sector off.
Superintencia de Valores y Seguros (SVS): Claims against insurance companies goes up 24, 8% in first semester of the year. According to the regulators, of the 2.562 claims in writing entered, a total of 1.358 had relationship with the earthquake and tsunami of Feb 27th.

Analysis

The Superintendence of Values and Seguros (SVS) gave the Report of Claims of the Market Insurer (IRMA), according to the information received in the first semester of the year 2010. "The IRMA gives information on the total claims received by companies in the insurance business, either general insurance or life. It considers the claims rate on the direct issues and regarding the number of denounced catastrophes produces and hired in the insurance companies. It also includes the claims data for the performances of the insurance agent sales whose main function is to lend appropriate consultantship to people to the moment to hire its insurance and in the event of catastrophe", said the regulator. In the first semester of the year 2010, the Area of Protection to the Investor and Insured (APIA) of the Superintendence of Values and Insurance received a total of 2.562 written claims. Of these, 1.960 (77%) it corresponded to insurance companies, 309 (12%) to sales agents of filial insurance of banks, 213 (8%) to filial or agents of retail, 74 (3%) to clearing of catastrophes and 6% to other agents of insurance. The number of entered claims experienced runs off with of 24, 79% regarding the second semester of 2009 when 2.053 claims were received. This can explain himself, partly, for the relative consultations to the earthquake and tsunami recently occurred, those totaled 1.358 claims in this topic. The matters more claimed on the part of the insured they were the compensation payment, covering and exclusions, validity-termination, the insured's obligations, prime payment and catastrophe liquidation. Of the entered claims, 84% of the cases is carried out directly by the SVS, 13% through an ordinary mail to the (customer claims service) Sernac and 3% for unique window of the Sernac. RESOLVED: During the first semester of 2010 they were solved 3.943 claims of general insurance or life. Of this total, 34% of the cases went favorable to the insured, that is to say, the claimed matter was solved. On the other hand that 31% of the cases was unfavorable and in 35% it doesn't classify in none of the categories, either because it is partially not solved or not for not having enough antecedents, etc. From the year 2006 at 2009 the claims in the insurance sector has registered an increase of 57, 77%., in total. ENTITIES: In relation to the claims received by the SVS regarding each a thousand million pesos of direct prime (sales) for company, in the case of the general insurance the biggest indexes were for the Mutuality of Customs officers (3.74); National Consortium (3.56); Santander (3.21) Cardif (2.97); HDI (2.76); it Produces National (2.59); Mapfre (LIN:MAPVIDC1) (2.55); ACE (2.21); BCI (1.79); Insurance company Magellan (1.69); RSA (LON:RSA) (1.58); Liberty (1.38); Penta Security (1.33); Cesce (1.15); Consolidated Chilean (1.14); Chartis (0.58); Coface (0.26) and Chubb Chile (0.15). For life insurance they were CLC (4.34); CN Life (2.38); Security Forecast (2.20); Cardif (1.65); Mapfre (1.53); ING (AMS:ING) (1.00); Interamerican (0.86); Metlife (NYSE:MET) (0.79); BCI (0.73); Santander (0.67); BICE Life (0.66); CorpSeguros (0.59); Banchile (0.57); Penta (0.53); Cruz of the South (0.52); Mutual Customs officers (0.51); ACE (0.51); Ohio International (0.45); Mutual Sure (0.45); BBVA (MCE:BBVA) (0.44); National Consortium (0.42); Euroamerica (0.32); Main (0.26); Corpvida (0.26); Consolidated Chilean (0.26); it Produces National (0.14) and Mutual Army and Aviation (0.13). TYPE OF INSURANCES 

The types of insurance more claimed in general insurance companies they are: Fire and additional risks (38%); Motorized Vehicles (28%); layoffs, cessation and temporary Inability to work (17%), among others.   While, in the case of the life insurance companies, the types of insurance that presented bigger claims were: Life (32%); Health (29%); you Pension funds Pensiones Vitalicias (10%); Inability or Disability (9%), among others. In the first semester of the 2010 they registered in the Area of Protection to the Investor and Insured a total of 12.637 consultations, versus the 9.752 that registered during the second semester of 2009. 39% of the consultations received in the first semester of this year, they were through phone attention, and 37 present%, 24% via web. 

The immature sector presents a high level of claims that are due to the lack control of the insurance operators and due to de lack of public adjusters that do not exist in the country. More and better insurance companies have a great opportunity to balance the sector off. Meanwhile adjusters will be filling their accounts with money due to the number of claims describe above.