Regulatory uncertainty is among the main challenges facing the insurance industry in Mexico, Colombia and Venezuela, according to the
‘Latin America Insurance Market Report 2014’
issued by Marsh.
The global insurance broking and risk advisory group reports that Colombia’s insurance sector is dynamic, with the entrance of a number of large global players – such as French group AXA, which acquired 51% of local company Seguros Colpatria. A government-backed infrastructure drive supported by strong economic growth of around 4%, is set to maintain that dynamism.
However, two new regulations are likely to increase costs for Colombia’s insurers. The first is the ‘premiums sufficiency’ regulation, which will require insurers with negative technical results (loss ratios) to boost capital to cover potential future losses.
Secondly, insurers will be required to contribute 2% of fire coverage premiums to a fireman’s fund.
In Mexico, the insurance market is expected to ‘remain favourable’, said Marsh. However, the country’s new tax law could pressure earnings.
Meanwhile, Venezuela remains the region’s most challenging environment. According to the report: “actions taken by the Venezuela government could result in higher rates, changes in policy terms and conditions, and a reduction in the number of insureds”.
“In the most extreme cases, it [regulatory uncertainty] has resulted in a withdrawal of capacity. Yet most governments in the region have taken a more restrained approach, opting for incremental legislative changes,” said Marsh.
GTNews asks Pugsley about what advice she would give to treasurers dealing with mergers and acquisitions, what the key challenges for her year ahead will be and how she is selecting a treasury management system (TMS).
The US money market fund reforms came into effect in 2016 and are already dramatically shaping US fund industry with investors flooding out of prime funds and into government securities. While the reforms are similar, they are not the same. GTNews interviews Yeng Bulter, global head of the cash business at State Street Global Advisors on the differences.
Tim de Knegt, strategic finance and treasury manager for the Port of Rotterdam, discusses how he is using blockchain, the challenges he will face in his role of treasury over the next 12 months and the advice he would give to someone starting out their career in treasury.
Due to the low interest rate environment and Basel III regulation many corporate treasurers, who may have in the past been very reliant on the banking sector to provide them with cash management solutions, have been forced to explore alternative options as banks have been refusing short dated cash deposits.