Is Mexico Looking Outwards to Expand its Insurance Business?
The insurance industry in Mexico seems to be taking a turn for the better. For a long time now, Mexican insurers have been insuring Mexicans in Mexico and visitors coming into Mexico. They have, particularly, benefited from the big numbers of tourists coming from the USA and Canada, because most of those people like getting into the country by road. Obviously then, they need insurance. Since Mexican law demands that anyone driving in Mexico must have Mexican insurance, the visitors have no choice but to oblige even if they come from next door.
Those driving personal cars are no different from those driving rental cars. As far as insurance is concerned, every driver must be in possession of a Mexican policy. In fact, it does not matter that a person had comprehensive or other category of car insurance elsewhere, say Canada or the US – all drivers must buy Mexican insurance. You may click here to get your Mexican insurance policy. That is the only way they will be indemnified in case of an accident or other losses associated with the motor vehicle.
Do Mexican companies venture abroad?
Mexican insurers have mostly looked inwards for business unlike companies in other sectors that venture beyond the Mexican borders for business. For example, among the top Mexican companies with interests abroad are GRUMA that deals with food; Cemex that deals with cement; Grupo Bimbo that deals with baked goods; FEMSA that deals in food plus bottled drinks; American Movil that deals with telecommunications; Mexichem that deals with petrochemicals; and Grupo Alfa that deals with auto parts and also chemicals. These examples have been cited in the Financial Times. The insurance industry clearly has no representation worth a mention at the top.
Do Mexican insurers go for acquisitions or mergers?
Many companies all over the world negotiate mergers with respectable companies in different countries in a bid to spread their business influence. In this regard, Mexican insurers have been shy and signs are only now emerging that the trend could change. Recently, Qualitas insurance company, which is Mexican, acquired another insurer in the state of Florida, USA. That move itself gave Qualitas access to 14 US states. The company is, of course, likely to grow its profits tenfold just by that one bold move. It was already doing well with representation in the 32 Mexican states, but going beyond Latin America is a big leap in the right direction.
Probably that was the incentive other Mexican insurance companies were waiting for to join the international market. It only requires one person to test the waters for others to jump in, and this is what Qualitas has, definitely, done.
What are the signs Mexican insurers are ready for the international scene?
- To begin with, those insurance companies incorporated in Mexico but doing business all over Latin American are doing exemplary well. These companies include Seguros Atlas, GNP (Grupo Nacional Provincial) and Inbursa.
- Qualitas Insurance had already established 165 branches even when it was operating in Mexico alone. That is not a small feat and such a company clearly shows it has the capacity to handle massive business.
- Patra Re has taken a big leap and established a marketing office in London, which is located within Lloyd’s building. London is a busy financial hub and that goes to show there is nothing to stop Mexican insurers from going for big business.