History of insurance in Argentina Essay

In 1984, ab pop 200 indemnification companies were in operation in genus genus genus Argentina. Although various legal restrictions have been placed on distant dam dates companies, many retain offices. The Superin decenniumdent of Insurance of the body politic regulates the indemnification market, which is a branch of the Ministry of Economy. The Argentine redress policy market is characterized by a relatively large flake of in currentrs with no single system of rules dominating the industry.From 1994 to 1997, there was a reduction in the number of insurers as some closed operations or were liquidated. Observers believe that there depart be further reductions in the number of restitution companies as consolidation of the industry and the quest for economies of scale and critical mass continues.In Argentina, policy companies argon non allowed to raise their prices without nonifying their nodes and explain why the raise in prices took place, nor atomic number 18 they a llowed to renew policies without prior nonification of the transforms in the policy. If an indemnification hold up troupe does not comply with this regulation, whizz disseminate fire take legal put to death against them by contacting the National Supervisory of Insurances (Advameg Inc, 2007). This paper go forth address the satisfying development of the Argentine sprightliness market of policy, especially infra the un commuteable current conditions.Insurance Landscape in ArgentinaTypes of policysApart from the de rigueur social damages, there are as well as a number of possibilities for obtaining secluded insurance to cover other eventualities. The al just about common insurances include support InsuranceThe need for a life insurance depends on come on, and dependents. liveliness insurance foresees in a defrayal to the beneficiaries of the deceased unrivalled. This payment nooky take place at once, or as a partial(p) interest bearing payment. The names of t he beneficiaries are stated in the insurance policy. Insurance companies calculate the costs of your policy based on trine factors. The first one is the mortality table that classifies people into groups and their rate of mortality.The higher(prenominal)(prenominal) the seek of the mortality group you belong to, the higher your cost of policy. succeeding(a) is the interest rate. Insurance companies invest their money in stocks, bonds etc. The higher the interest rate of the investments, the lower the cost of the insurance. Last factor of deviate on the price are the operating costs of the insurance company. life history insurance are classified according to duration where distinction is bother among temporary (term) insurance and life-long insurance. Temporary insurance notwithstanding covers the verify person for a time-span specified in the policy. Life long insurance provides covers until death.Secondly is bounteousness which bring in a distinction between Fixed Premium s and take a chance Premiums. Fixed premiums mean that the same amount of premium is remunerative during the insurance. Risk premiums rise in premium as the age of the insured person goes up.Thirdly is the persons being covered by the insurance. finally is the flexibility of payment of premiums where a distinction is made between tralatitious life insurances and savings life insurance. The traditional insurance demands that premiums are paid at set dates. With savings insurances the date and amount of premium payment are more flexible.Take into forecast that price is not the only criteria when choosing a company. The reputation and service the insurance company offers should also be considered authoritatively. Furthermore, the company should be registered so that assistance can be presumption in disputes between the insurance company and clients. When buying a life insurance, one ought to answer all questions on the policy form right on which mainly refer to health issues bef ore signing and submitting the forms. This is mainly beca do if afterwards it turns out any questions where not answered truthfully, the insurance company can resolve not to pay.Further important points when buying a life insurance include the start and end of the policy, the benefits that might be paid out and those that can become less after a certain age is reached, Clauses regarding age and payments, and the time the company takes to start the running time of the insurance. political machine InsuranceBy law it is mandatory to have gondola insurance in Argentina. Car insurance in Argentina covers the driver and/or insured person and third parties from damages suffered from fire, theft and accidents. Premiums paid are calculated based on the brand and model of railcar, usage of the car , geographic location, marital status, sex and age. The peson buying the cover must keep in mind the start and end of coverage, how old a car is, and the value of the parts to be insured especia lly if they are to be insured independently.Household InsuranceThe household insurance in Argentina covers the material as individuals in your household. Examples of what is covered by household insurance are damages due to fire, theft and burglary, water damages, civil responsibility, in-person accidents, accidents of domestic employees. Wear and tear of property, damages due to war or natural disasters such as earthquakes and tornados is not covered.Choosing insuranceMake sure before deciding with which company to buy an insurance, you k directly what the fiscal concomitant of the company is. Besides the price of the policy the service and reputation of the company should also be important factors to consider when deciding. If to buy directly with an insurance company or by an agent is also another(prenominal) factor.The Argentina Insurance Report provides independent forecasts and competitive intelligence on Argentines insurance industry. It includes BMIs Insurance Business En vironment Rating (IBER), which brings together a number of pieces of relevant quantitative data, together with BMIs Country Risk Rating (CRR). It is now much easier to consider the vexation environment for the insurance sector in any one region relative to the disdain environment for other industries in that country that are surveyed by BMI, and the business environment for the insurance sector in other countries.Argentinas IBER is a moderately engaging insurance market for foreign insurers. deep down the region, the Bahamas has the highest IBER ranking, with a very high score in the risks to realization of potential drop returns. The competitive landscape, in twain the non-life and the life segment, is fragmented. Both segments are open to participation by foreign groups.It is likely that the landscape will change dramatically in the succeeding(a) few years, possibly after long consolidation. This style that there is luck for cross-border operations that currently have a relatively small front man to become major players in the market. We do not however, expect any completely new market entrants. Although there a strong growth forecasts for Argentina, these are not at the wink translating into high growth judge for the insurance market. (BMI, 2008).The competitive landscape, in both the non-life and the life segment, is fragmented. Both segments are open to participation by foreign groups. It is likely that the landscape will change dramatically in the next few years, possibly after considerable consolidation. This means that there is opportunity for cross-border operations that currently have a relatively small presence to become major players in the market. However, completely new market entrants are expect. Economic and political reform if reinvigorated provides positive flow-on effects for the insurance market. Increased transparency has been campaigned on as an issue. However, it remains to be seen if it will be implemented. Although there is a strong growth in Argentina, this is not at the moment translating into high growth rates for the insurance market. (Braga, 1996). ram Analysis for Insurance in Argentina(Strength Weakness Opportunity Threats) wonk Analysis is a strategic planning tool used to measure out the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the immanent and remote factors that are favorable and unfavorable to achieving that objective.The purport of any prepare analysis is to identify the key internal and external factors that are important to achieving the objective. Internal factors are the strengths and weaknesses internal to the organization.External factors are the opportunities and threats presented by the external environment.The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organizations objectives. W hat may represent strengths with respect to one objective may be weaknesses for another objective. The factors may include all key fields as well as personnel, finance, manufacturing capabilities, and so on. The external factors may include macroeconomic matters, technological change, legislation, and socio-cultural changes, as well as changes in the marketplace or competitive position. The results are often presented in the form of a matrix. The aim of the insurance company ought to be maxinizing the strengths and opportunities and minimizing the weaknesses and threats. (Business help, 2008)Opportunities and threatsOpportunitiesSWOT Analysis influences the Opportunities for the insurance businesses and these can be seen as targets to achieve and exploit in the future for physical exercise Being in a good financial position creates a good reputation for future growth, Skilled and experienced workforce means that they can be moved and trained into other areas and locations of the bu siness, competitor red bankrupt wherefore creating a takeover opportunity, availability of broadband applied science plus the installed in the area which is useful for Internet use, Increased spend power in the Local/National economy, and moving the insurance go into a new market sector . (Business help, 2008)ThreatsThe final part of the analysis will also be seen as the most feared the Threats. It has to be make and therefore taking into account the weaknesses, the threats seem too clear. For examples Large and increase competition from other insurance companies, Rising cost of Wages, Possible motility costs, Local authority refusing plans for future building expansion, Increasing interest rates by lenders therefore increases borrowing repayments, and lastly existing covers becoming mossy or unpopular. (Business help, 2008)Opportunities for a US Insurance companies.As consolidation of the insurance industries and the quest for economies of scale and critical mass continues companies can still scrape up their ways to certain regions as long as they meet the requirements and laws. (Wray, 2008). make to Resort to International LawAccordingly, a body of international law, not dependent on the law or interpretation of any one country, has developed as the standard for expropriation claims against a host government. In turn, most political risk insurance policies over the years have needed that for there to be an expropriation, the governments actions must be in violation of this standard of international law. Application of the traditional standard to regulative takings has proven to be difficult. Because of the public purpose test, normal regulations or change of law is not a wrongful action on a lower floor international law and therefore is not an insurable event under political risk insurance expropriationCoverage.On the other hand, it is easy to theorize a host government attempting to cloak a wrongful expropriation with the bearing of legitimat e regulatory action. (Wray, 2008).The credit derivative marketDuring the past ten years, credit derivatives have become a basic tool for risk management in the banking sector for both corporate credit and country risk management. Since the mid-1990s, banks have increasingly used credit aegis to commute and reduce corporate and e unify market exposure inherent in their lending activities. Insurance companies have also participated (mostly in the non-emerging market arena) both as providers of protection (to capture higher returns and better spreads), and as buyers of protection (to manage their exposure and diversify their portfolios).Insurance companies buy insurance to channelize resources from good times to bad times.They do this by pooling risks, e.g., motor vehicle insurance. If population is large and individual risks are independent therefore conglobation loss is predictable. This enables simple strategies for setting premiums as a mark-up over the expected aggregate lo ss. Practical considerationsinclude availability of data for insurance companies, which enables them to betoken the distri entirelyion of aggregate losses from their pool of risk. Low enough proceedings costs (collecting data, writing policies, settling claims) are what are considered as policies, which make risks attractive.Catastrophe risks, e.g., floods, hurricanes, and earthquakes together with weather risks temperature and rainfall fluctuations are not attractive to many insurance companies. The Catastrophe risks are low-frequency high-severity risks unlike motor vehicle risks, which are high-frequency low-severity risks. Low frequency has probabilities of occurrence and damages are not precisely computed. There is need for a lot more data than when it is high frequency, Variance of loss is high, Premium setting is difficult, and Capital requirements to warrant solvency are large.Markets for Catastrophe RiskA large proportion is not insured or under-insured. Premiums can be high (as high as seven times the expected losses the actuarially fair level). Premiums can change drastically with an event suggesting that probabilities of extreme events is not well established and therefore revised with any new information. Markets for catastrophe risk do not work very well.ConclusionRecent developments.Congressional legislation now allows insurance carriers and other financial institutions, such as banks and securities firms, to sell one anothers products. More insurance carriers now sell financial products such as securities, mutual funds, and various retirement plans.This approach is most common in life insurance companies that already sold annuities, but property and casualty companies also are increasingly selling a wider range of financial products. In order to expand into one anothers markets, insurance carriers, banks, and securities firms have engaged in numerous mergers, allowing the merging companies access to each others client base and geographical markets therefore Argentines can be covered by US insurance companies. This way many insurance companies are able to insure ugly risks.Insurance carriers have discovered that the Internet can be a powerful tool for reaching potential and existing customers. Most carriers use the Internet simply to post company information, such as gross revenue brochures and product information, financial statements, and a list of local agents. However, an increasing number of carriers are starting to expand their Web sites to enable customers to access online account and billing information, and some carriers even allow claims to be submitted online. Many carriers also provide insurance quotes online based on the information submitted by customers on their Internet sites. In fact, some carriers will allow customers to purchase policies through the Internet without ever speaking to a live agent.In profit to individual carrier-sponsored Internet sites, several lead-generating sites have emerged. Th ese sites allow potential customers to introduce information about their insurance policy needs. For a fee, the sites forward customer information to a number of insurance companies, which review the information and, if they square up to take on the policy, contact the customer with an offer. This practice gives consumers the freedom to select the best rate. If this does not make the insurance landscape manageable then it is on the collapse. (Bureau of Labor Statistics, 2008).Work citedBusiness Monitor International, (n.d.). Argentina insurance report. Accessed 16thMay 2008 from http//www.businessmonitor.com/insurance/argentina.htmlBusiness Monitoring International (BMI), (2008, March). Argentina insurance report, pages 31. Accessed 16thMay 2008 from http//www.researchandmarkets.com/reports/c89667Michael Braga, Tempa utter business Journal, (1996, 21st June). Bankers insurance group on EEC Argentina. Accessed 16thMay 2008 from http//www.bizjournals.com/tampabay/stories/1996/06/2 4/newscolumn1.htmlBusiness help, (2008). SWOT Analysis-Opportunities and threats Analysis. Accessed 16thMay 2008 from http//www.bizhelp24.com/marketing/swot-analysisopportunities-and-threats.htmlRobert Wray. (2008, April). Political risk Insurance Newsletter. computed tomography Avenue, nw suite 350, Washington dc, Volume 4, Issue 1Advameg Inc, (2007). Argentina forum. Accessed 16thMay 2008 from http//www.nationsencyclopedia.com/Bureau of Labor Statistics, U.S. Department of Labor, Career Guide to Industries, 2008-09 Edition, Accessed 16thMay 2008 from http//www.bls.gov/oco/cg/cgs028.htm