Latin America and Caribbean
Brazil | Chile | Colombia | Costa Rica | Guatemala | Mexico | Peru
Summary
GDP in Latin America and the Caribbean for 2020 is expected to contract nearly twice as much than for the United States. In addition to Covid-19, the Caribbean and Central America have faced several weather-related shocks during the pandemic, exacerbating their situation. High levels of informality add a level of complexity to social protection mechanisms. In 2019, Argentina, Brazil, Chile, Colombia, Ecuador and Uruguay were the only countries in the region that had employment insurance for people who work in the formal sector.
The challenges faced by these countries are similar, as the Covid-19 pandemic disrupted work models, educational systems, forms of trade and boosted digitalization. The regional insurance industry adopted some initiatives at the beginning of the pandemic that were important, such as voluntary coverage of death risks from Covid-19, as in Mexico, Costa Rica and Brazil, or the proactivity to offer alternative premium payments to policyholders who had lost income, as in Peru.
In general, the sector was able to move to remote operation without major problems, although the work in home-office, widely adopted by insurers and supervisors, also brought cyber risks.
With social distancing, insurers had to develop new ways of communicating with policyholders, being forced to invest in digital channels. Some organizations are deploying on-demand platform models, taking advantage of websites and social media. The pandemic also highlighted protection gaps, such as the lack of protection for health (because the public health response was very weak) and for MSMEs (which are key to emerging and developing economies).
However, supervisors accelerated digitalisation processes during the pandemic, authorizing online insurance operations and improving remote supervision techniques. Regulatory Sandboxes, such as the one launched by Brazil, also gained prominence in the search for innovation. In turn, the industry sought to take advantage of the momentum, covering events related to the pandemic, even in cases of contractual exclusions, and designing innovative products and digital solutions.
Latin America and Caribbean news
-
EY - How Latin American insurers are evolving (link) 26 February 2021
-
OECD - 'COVID-19 in Latin America and the Caribbean: Regional socio-economic implications and policy priorities' (link) - 8 December 2020
-
The Impact of COVID-19 in Latin America and the Caribbean (link) - November 2020
-
UN Women - The Economic Impact of COVID-19 on Women in Latin America and the Caribbean (link) / El Impacto económico del COVID-19 en las mujeres de América Latina y el Caribe (link)
-
Survey highlights impact of COVID-19 on Latin America’s life insurance landscape (link) 13 August 2020
-
UN - Policy Brief: The Impact of COVID-19 on Latin America and the Caribbean (link) July 2020
-
COVID-19 Response in Latin America (link) June 2020
-
In this article, we discuss the context and the initial responses of eight selected Latin American countries, including similarities and differences in public health, economic, and fiscal measures, and provide reflections on what worked and what did not work and what to expect moving forward.
-
-
International Organisation of Pension Supervisors (IOPS) member responses - click here
-
Information from IOPS members and other relevant supervisory authorities in response to the current situation, to help financial institutions and consumers from the private pension sector to face the consequences of this major crisis
-
By country
KPMG - Government and institution measures in response to COVID-19 (link)
18 Brazilian insurers announce that they will indemnify policyholders for events arising from the COVID-19 pandemic.
- Mapfre, BB Seguros and Chubb announced that they will pay indemnities in the event of death due to COVID-19, according to the amounts provided for in life insurance policies. The definition overlaps the pandemic exclusion contractual clause, on an exceptional basis, aiming to minimize impacts on society.
- Liberty Seguros, Previsul, Sura, Icatu, Prudential, MAG Seguros, MetLife, Pais, Centauro among many others announced last week life coverage for losses from the pandemic. Prudential has already received the first indemnity claims.
- In order to reduce the impacts on society, Mapfre also decided to maintain the same conditions and prices as in 2019 when renewing Auto, Residential and Rural insurance. In addition, Fundación Mapfre is donating € 3 million to support initiatives by government authorities and health entities, both for the prevention and treatment of the disease and the fight against the pandemic in Brazil. The benefited projects will be announced soon. (https://www.segs.com.br)
24 Mar 2020 - The Brazilian government announced a set of initiatives including aid to small businesses, informal workers, flexibility in complying with fiscal targets, easing of labor laws, financial support to states (Brazil has 26 states) and extension of tax payments (link)
Chile
Medidas Covid 19 - Comisión para el Mercado Financiero
Colombia
The SFC are supporting consumers and supervised entities through their digital channels - they also suspended the terms of the current administrative and judicial processes - link to press releases
24 Mar 2020 - COVID-19 y el futuro de la regulación
este artículo creado por el equipo legal de Suramericana S.A., para el Centro de Estudios Regulatorios, en donde vislumbra el futuro de la regulación, y del racional del regulador, a partir de los sucesos generados como consecuencia del Covid-19
Costa Rica
27 May 2020 - SUGESE issued a document of “Good Practices of conduct in the Costa Rican insurance market related to the COVID-19 health emergency”.
This document was a result of the specific process related to COVID-19, of monitoring operations and maintaining regular contact with the industry, in order to know the measures that are being implemented, understand the challenges faced and the expected impacts regarding the fair and equitable treatment towards the policyholders, as well as the sustainability and confidence in the market.
Document in Spanish
24 Mar 2020 - measures adopted by the insurance industry: ALL the companies that are in the health insurance market have decided to exceptionally and indefinitely eliminate their exclusions in the event of a pandemic or epidemic and are committed to providing coverage to all their policyholders in both individual policies, as well as group or collective. (link)
Guatemala
The Superintendencia de Bancos goes to digital communications only as of 25 March. (link)
Mexico
Mexico’s cat bond program set for shake-up or cancellation, as FONDEN to close. (link)
Peru
Medidas de la SBS ante la emergencia sanitaria COVID-19 (link)
21 Mar 2020 – SBS Peru coordinates with insurance companies to facilitate payment of insurance premiums (link)
