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Fasecolda: Industry premiums up 6% in 2004

Bnamericas Published: Monday, February 28, 2005
The Colombian insurance industry reported total premiums of 6.2tn pesos (US$2.7bn) in 2004, a 6% increase compared to the previous year, local insurance association Fasecolda said in a report. Although premium growth came in slightly above annual inflation at 5.5%, it was well below the 9.5% rise in premiums registered the previous year, according to Fasecolda. The industry's P&C premiums rose 5.8% to 3.5tn pesos last year compared to 2003. The same line grew 8.5% in 2003. "Weak premium sales are due to three main factors affecting the P&C insurance," Duff & Phelps ratings analyst Milena Carrizosa told BNamericas. "The revaluation of the peso against the dollar, a drop in reinsurance rates and the pricing war that has hit most P&C lines and in particular the auto segment." Fasecolda reported total life insurance premiums of 1.6tn pesos in 2004, a 10.3% increase compared to the previous year. Combined pension, annuity and health insurance premiums grew only 1.1% last year to 989bn pesos. Total claims rose 6.1% to 2.4tn pesos in 2004 compared to the previous year, which was similar to the 6.9% increase recorded in 2003. "We expect higher premium growth in life insurance compared to P&C in coming years, as the general insurance market is more mature, while life insurance has more room to grow," Carrizosa said. Pension and annuities are expected to show the strongest results in 2005, according to the analyst. Colombian insurers reported net profits of 498bn pesos in 2004, a 5% increase compared to the previous year. The technical result showed a loss of 48bn pesos last year compared to a loss of 17bn pesos in 2003.

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