The Chilean general insurance industry is projected to grow from CLP3.2 trillion (US$4 billion) in 2020 to CLP4.6 trillion (US$5.8 billion) in 2025, in terms of gross written premiums, according to GlobalData. The leading data and analytics company notes that Chile’s general insurance industry is expected to grow at a compound annual growth rate (CAGR) of 7.6% over 2020-2025, supported by a faster economic recovery in the country post-pandemic.
Anjuli Srivastav, Insurance Analyst at GlobalData, comments: “The general insurance industry in Chile grew by 7% in 2020, driven by the growth of major insurance lines in business such as Property, Liability and Marine, Aviation and Transit. The country’s economy is expected to grow by 9.5% in 2021, up from a forecast of 7.5% in 2020, which is expected to further boost the country’s general insurance industry.”
Property insurance is the largest segment in the Chilean general insurance industry, accounting for 52.2% of gross written premiums in 2020. The country’s vulnerability to natural hazards as well as the damages suffered due to the social unrest in October 2019 supported growth of the Fire and Natural Hazards insurance sub-segment, which grew by over 25% in 2020.
Srivastav notes: “The shift to renewable energy projects is also fueling demand for Property Insurance in the country. Increased investments towards green energy projects such as the CLP740.0 billion (US$934.0 million) Huemul wind project and Andes Renovables’ CLP1.4 trillion (US$1.8 billion) renewable energy platform in 2020 is expected to support the Property Insurance industry, which is forecasted to grow at a CAGR of 9.7% during 2020-2025.”
Motor insurance is the second largest segment, accounting for 25.6% of the general insurance industry’s gross written premiums in 2020. After witnessing a 5.2% decline in 2020 due to lockdown restrictions, the segment is expected to grow by 1.9% in 2021, driven by an increase in automobiles sales. It is expected to grow at a CAGR of 3.1% during 2020-2025.
Non-life Personal Accident & Health (PA&H) insurance accounted for 4.6% of the general insurance business in 2020. The segment declined by 17.5% in 2020 owing to the drop in compulsory personal accident premiums during the pandemic. It is expected to grow at a CAGR of 3.3% during 2020-2025.
Anjuli concludes: “Increased government spending as well as a successful vaccine rollout are expected to provide a boost to the country’s economic recovery in 2021. The government’s push for infrastructure expansion projects along with the country’s geographic factors are expected to create new business opportunities for general insurers over the next few years.”