The 42 insurance companies in the country plan to close the year with revenues of USD 1,450 million, 11.5% more than last year, according to the Insurance Association of Ecuador (harasses).

Manfredo Ferrara, president of the Federation of Insurance Companies of Ecuador (Fedeseg) notes that in the last two years the sector has grown dramatically due to the entry of multinational firms, such as ACE USA, which acquired Rio Guayas by USD 55 million.

Also, Mapfre, Spanish capital, Atlas bought last year, QBE, which has Australian and European capitals, Colonial acquired; insurance Bolivar Davivienda Group of Colombia, was made Colvida. And recently, the American Liberty bought Cervantes, who belonged to the International Bank, as well as Pan.

The increased presence of foreign insurers explained by two reasons: first, Latin America through good economic times and is attractive to new investors. On the other hand, private banks should sell their related businesses until last July, including insurers. Product with this legal requirement, Banco Pichincha had to sell its stake in AIG Insurance and Metropolitan Pichincha, Produbanco sold Produseguros and Banco de Guayaquil Guayas River dumped. By 2013 it is possible that this trend will continue because the Ecuadorian market is small and full of small companies, which are under pressure to merge or pass into other hands.

Legal changes that are underway and the new rules were issued pointing in that direction. For example, have tightened the rules on who can assume risk insurers.

Ferrara expected to adopt these measures SBS gradually so as not to affect the performance of companies.

In this coincides Pablo Cevallos, professor of financial law, securities and insurance at the Universidad San Francisco de Quito. The 2013 is a complex year for insurance companies, which will have to adapt to Solvency II, suggested by the Basel Committee, which contains rules and standards for greater control in taking risks. Another factor to consider is the draft Insurance Act, which is expected to send to the National Assembly next year, which seeks to strengthen the reserves that should have companies to operate in the domestic market.

Patrick Salas, director of Harry, takes stock of the year and believes that this year has been positive. Insurers have tried to come en masse to people with new products such as life insurance best prices and most convenient services. Currently, the products that are most in demand in the local market are vehicle insurance, followed by living and medical care.

In terms of sales, the industry is expected to maintain a growth rate over the next year, probably less rapid than previous years, but in any case in the positive range, Salas points.

Rodrigo Cevallos, president of South Insurer argues that competition has become more fierce this year because in the country there are 42 insurance companies. For next year, hopes to create new products with better rates to compete with international firms.

Source: EL COMERCIO