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Mexico's largest automobile insurance company Quálitas, which launched operations in El Salvador earlier this month, is analyzing an expansion to Costa Rica and Panama as part of its internationalization strategy, top executives from Quálitas told BNamericas.
"Both markets are on our radar," said company CFO Wilfrido Castillo, who does not rule out entering other Central American countries.
The Panamanian and Costa Rican insurance markets are Central America's two largest.
Panama's insurance industry reported US$607mn in written premiums in 2007, data from the local regulator show.
In Costa Rica, state-run monopoly Instituto Nacional de Seguros recorded 254bn colones in premiums (US$520mn) in 2007.
The Mexican insurer is currently piloting its business model in El Salvador, where it runs auto insurer Quálitas Compañías de Seguros. The latter is owned 50:50 by Quálitas and Scotiabank Insurance Barbados, with Quálitas responsible for managing the operation.
The move into El Salvador is seen as a strategic step for gaining expertise in international expansion, said Quálitas investor relations officer Luisa Salgado, who admitted the small size of the El Salvadorian insurance market limits growth opportunities.
El Salvador's insurance industry reported US$42.2mn in auto premiums for the January-September period. The figure is equivalent to around 7% of the US$640mn - or 6.92bn Mexican pesos - in written premiums recorded by Quálitas in the same stretch.
The entry into El Salvador took longer than expected for Quálitas, which requested an insurance license from El Salvador's financial sector regulator SSF in March 2007. The insurer was authorized to launch operations in November this year after the local regulator granted the license the previous month.
Hopefully, in the future the process of entering a new market takes less time, said Castillo.
Quálitas held 11.3bn pesos in assets and equity of 1.70bn pesos at September 30.