Dominican Republic Insurance Report Q2 2016
BMI View: The Dominican Republic's insurance market will continue to be one of the least developed inthe Caribbean, with per capita premiums of just USD70.1 in the non-life sector and a paltry USD8.8 in thelife market. Currency weakness will also continue to plague the dollar terms returns for many operators.
Health insurance, an underdeveloped line of business, is likely to outperform our forecasts given the recentoutbreak of the Zika virus.
Key Updates And Forecasts
We note upside risk to health insurance premium growth due to the spread of the Zika virus in theCaribbean, a mosquito-transmitted infection believed to cause birth defects. Although the virus has yet tospread to Dominican Republic, the WHO expects the virus to spread to every nation in the Americas,except Canada and Chile, by end-2016. The US Centers for Disease Control and Prevention (CDC) hasissued a travel alert encouraging women who are or could become pregnant to 'consider postponing travelto any area where Zika virus transmission is ongoing'. While we maintain our core view that visitorarrivals will continue to rise in 2016, we caution that concerns over the virus will cap arrivals growth.
The Dominican Republic life insurance market is currently the least developed in the Caribbean, and wedo not expect a significant turnaround in the medium term. Life insurance products are not attractive toDominicans, partly because their value has yet to be sold, but also because of low levels of disposableincome.
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