Fitch Ratings recently issued its annual report on the Argentinean insurance market entitled "El mercado asegurador argentino: Resultados y perspectivas 2009." The report reflects significant turmoil in the market given the fluid political, economic and regulatory situation in Argentina, and notes in particular that:
- The global economic crisis, together with internal factors, has had a significant impact upon the market over the last year leaving it characterized by "uncertainty." Fitch further expresses concern that certain regulatory actions taken by the Argentinean insurance regulator, the Superintendencia de Seguros de la Nacion, as to valuation of insurance companies' investment portfolios may be distorting the true value of those companies, including their liquidity and solvency.
- When comparing to the twelve months ending May 2008, the overall insurance market grew 6.1% over the last year. Penetration rates remain low and the industry is becoming increasingly dependent upon the automobile insurance sector to drive growth. By comparison, the economic downturn has disproportionately impacted certain lines that had been recently gaining momentum, including agriculture, transport, life and pension insurance.
- After four years of improving results as to capitalization and growth, Fitch expects the industry to remain flat but stable in the coming year.
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