Abstract
Despite the stronger-than-expected Q408 real GDP growth figure, we continue to
believe that the
Argentine economy is likely to suffer substantially in
2009, and have, in fact, revised down our real GDP
growth forecast from
0.6% to -1.0%. The negative impact of the drought on the export sector has
been a
major driver of this revision, as has the large build up in
inventory seen in the fourth quarter. A run on the
peso as a result of the
government' s inflationary fiscal policy poses a major downside risk.
Argentine real GDP expanded faster than we anticipated in Q408, coming in at
4.9% y-o-y, which
brought the 2008 full-year growth figure to an
impressive 7.0%, above the 6.0% expansion we were
expecting. That said,
the build up of inventory and the deteriorating outlook for the exports sector
as a
result of the drought, has fueled our downward revision of real GDP
growth to -1.0% in 2009. We are
also forecasting a 0.9% contraction in
2010, and just 1.2% growth in 2011.
In Latin America, we profile 21
companies. These are AEGON, AGF, AIG, Allianz, AXA, Cardif,
CNP, Generali,
HDI-Talanx, HSBC Insurance, ING, Liberty Mutual, MAPFRE, MetLife, New
York
Life, Prudential Financial, QBE, RSA, the Hartford, Principal Financial and
Zurich.
Over the 12 months to the end of June 2008, total premiums in
Argentina rose by 25% to ARS23.98bn.
Non-life premiums rose by 25% to
ARS17.68bn, while life premiums rose by 25% to ARS6.30bn.
Between now and
the end of the forecast period, we expect that annual non-life premiums will
grow by
ARS29.11bn, while annual life premiums should grow by ARS5.70bn.
Growth in non-life premiums
should be driven by the general growth of
nominal GDP plus a rise in non-life penetration from the
current level of
1.44% to 1.65%. Growth in life premiums should be driven by the change in the
overall
population and a rise in life density from US$46.48 to US$65 per
capita. BMI’s Insurance Business
Environment Rating for Argentina is
53.0.
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