Bolivia

Bolivian insurers are complaining about their fast vanishing profit margins on compulsory traffic accident insurance (SOAT) business. By the end of August 2002, the market’s written premium income for this class had reached only US$5.5mn against the US$4.96mn insurers had paid out in claims. Alejandro McLean, executive vice president of local insurer Bosa Seguros, said that the average monthly loss ratio (US$600,000 per month) was too high. He noted that motor accident claims during the last four months of the year would exceed US$2mn and that Bolivian insurers were looking at an underwriting loss of between $1.5mn and $2mn for 2002. He feared that, given current premium rate levels, SOAT will not be sustainable in future years.