Regulatory and legal reforms keep pace with global change

By most measures, Chile is regarded as the third largest insurance market in Latin America. It is widely considered to have the most stable market and political environment in the region. These advantages, however, are significantly counterbalanced, according to M. Machua Millett*, by the relatively high costs of doing business in the market and the country’s mature insurance market, as reflected by the region’s highest insurance penetration rate of 6%. Given the maturity of Chile’s insurance market and regulatory scheme, it is not surprising that the market’s two most significant trends mirror efforts underway in the United States and Europe: the move to modernize the country’s insurance laws and theinitiatives to reform the solvency rules and capital requirements for the sector

With the exception of fairly minor regression in 1998 and 2001-2002, total premiums for the Chilean insurance market have increased steadily since 1985 from less than US$500mn to more than US$11bn in 2008.