Honduras Insurance Sector Biannual Report

©image: Fitch Ratings

At the close of the first semester of 2008, consolidated assets represented 39% of assets, a proportion which is higher than that of the other countries in the region except for El Salvador (44.5%). The sector also had the second lowest level of operational leverage (1.1 times), Costa was at (1.0), despite the sustained and important growth of premiums during the last few years...

Source: Fitch Ratings Centroamerica

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"For the sector's improvement, it will be key to adjust fees for products with high accident rates, as well as more careful subscription"

By the end of June 2009, net premiums had grown at an inflation adjusted rate of 9.8%, although lower growth should be expected for the end of the year, due to worse economic performance.

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Fitch's Special Report analyzes the characteristics, strengthens and performance for the current year and the short term outlook for the sector.

SUMMARY

The insurance sector is the biggest and has the greatest growth in the region.
At the end of the first semester of 2008, the net premiums of the INS added up to US$289.6 million, which makes this market the biggest in Central America (not including Panama), and it also had the greatest growth compared to June 2007 (28%), as a result of efforts by the INS to improve the placement of its products. These results by the sector (2.6% of the GDP) are due to a greater level of income and insurance culture compared to the region, and high priced subscriptions due to the lack of competition in the market...

Insurance: First Half 2009 and Outlook for 2010

January 2010

Fitch Central America published a special report called "Central American Insurance Sector: Performance in the First Half of 2009 and Outlook for 2010".

Despite the economic contraction of Central American economies in the first half of 2009, the region's insurance industry grew 3% (excluding Panama) when compared to the same period of 2008, reaching $928.1 million in net premiums.

Central American Banks: Biannual Results and Perspectives

August 2008

In Fitch's opinion (in the Special Report), the complex economic environment in the region is starting to have an effect on the performance of the banks in Central America.

"Results for the first half of 2008 indicate that the slump in the economy and the increase in inflation have weakened the quality of bank assets," indicated the report.