Infonavit to offer unemployment insurance from Jan

Tuesday, September 26, 2006

Mexico's largest mortgage lender Infonavit will offer mandatory unemployment insurance to its clients for the first time starting January 2007, the institution said in a press release.

Mexico-based insurer Genworth Seguros will underwrite the policies after winning a two-year contract.

The insurer will charge a one-time premium equivalent to 0.8% of each loan to cover up to six monthly payments during the first five years of the loan in the event a borrower becomes unemployed through no fault of his own.

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Infonavit estimates that 1 million loans of an average 200,000 pesos (US$18,007) will be insured from 2007-08, a Infonavit spokesperson told BNamericas.

Infonavit is a tripartite organization with an equal participation from employees, employers and the federal government. It had 416bn pesos in performing loans at the end of June.

Genworth Seguros sells both life and non-life insurance and is a subsidiary of US insurance holding company Genworth Financial (NYSE: GNW). The company reported 603mn pesos (US$56.7mn) in direct premiums in 2005, equivalent to a 0.4% market share.