Last year, the individual (non-compulsory) life insurance market increased by 20% compared to 2021. However, they account for only 15% of total insurance sales in the country. The scale of coverage by volume is highest in cars, then homes, and last comes life insurance.
Unlike other neighboring countries, such as Chile, where the equation is that 80% of insurance is Life and 20% Property, in Argentina, only 9% of the population has life insurance, against 19% in Brazil or 15% in Mexico. The global average coverage is 32%, “which shows the huge way to go,” says the Civil Association of Life and Pension Insurers (AVIRA), which brings together the 43 most important companies in the sector. According to the latest data from the National Insurance Superintendence (SSN), the number of individual life policies in force, as of March 2022, amounts to 4,229,121.
Personal insurance covers individual and group life (through companies, for example). These are covers so that the insured’s family is protected in the event of death or disability, natural or due to accidents. Basically, it works by conceding compensation to the beneficiary insurance if one of these events occurs in the insured.
For many reasons, Argentina has been unable to exceed its participation ceiling of 0.6% of GDP for more than a decade. This obstacle in the expansion is given by the uncertainty, inflation and recurring economic crises.
“A stable environment contributes to development, but it is also important to generate insurance awareness: if you are not there, your loved ones are powerless,” explains Fabián Hilsenrat, vice president of AVIRA. Although it is also true that “when there are factors of instability, people postpone decisions”, he underlines.
From Galicia Seguros recognize that companies often fail to connect people with the true purpose of this type of coverage. “It continues to be seen as an expense. Therefore, since it is not mandatory and in many cases (if you work in a dependent relationship) and you have group insurance, it ends up being left aside”, comments Andrea Miorelli.
“Argentinians, at the moment, are very clear (and the numbers prove it) the importance of coverage for their business, car, home or mobile phone. But it strikes how life insurance is not yet on the priority list safeguard,” the directive added.
In DDN Central de Seguros, the percentage of Life insurance that the company sells is 9.3% of the total. Julia Chaves, ART and Life manager of that company, says that in 2022 the policies “have been maintained compared to the previous year, So far it is not a segment that is growing year on year”She said.
On what elements are missing for life insurance to achieve further expansion, the board agreed with Hilsenrat: “insurance culture, we need to educate people, provide them with transparent information with accessible products and help them become aware of the importance of protecting the thing more precious we have and above all in such an ambivalent reality as the current one”, he says.
Tax incentives for potential policyholders are also part of the elements to expand the market. This is why companies are celebrating a recent measure long awaited by the sector. In January, the deductible for Individual Life, Savings and Retirement Life insurance was increased from $24,000 to $42,921.24, applicable to 2022 tax returns. In any case, the insurers say that, with a triple-digit annual inflation, the amounts are always past due.
Source: Clarin
