RANKING OF INSURANCE GROUPS IN LATIN AMERICA 2012

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1 RANKING OF INSURANCE GROUPS IN LATIN AMERICA 2012 October 2013

2 TABLE OF CONTENTS 1. Introduction 2. Total 3. Non-Life 4. Life 5. Local Groups and Multinationals 6. Methodology 2

3 Partial reproduction of the information contained in this study is permitted provided that the source is cited. 2013, FUNDACIÓN MAPFRE Pº de Recoletos, Madrid Tel:

4 1. Introduction FUNDACIÓN MAPFRE hereby presents the ranking by premium volume of the 25 largest insurance groups in Latin America for the eleventh straight year. This year's edition refers 2012 and on this occasion comprises three rankings: Total, Life and Non- Life. Additional information referring to local and multinational insurance companies is included separately of Insurance Groups in Latin America 2012 TOTAL Premiums (millions of Groups Country euros) % Market share 2012 (%) 1 BRADESCO SEGUROS Brazil 9,619 10, ITAÚ/UNIBANCO HOLDING Brazil 6,964 8, MAPFRE Spain 7,333 8, BRASILPREV Brazil 4,018 6, ZURICH Switzerland 4,675 5, METLIFE United States 3,429 3, PORTO SEGURO Brazil 3,300 3, LIBERTY MUTUAL United States 2,691 3, CNP France 2,399 2, ALLIANZ Germany 1,986 2, SURAMERICANA Colombia 1,761 2, GRUPO NACIONAL PROVINCIAL Mexico 1,820 2, TRIPLE-S Puerto Rico 1,579 1, AXA France 1,621 1, HSBC United Kingdom 1,794 1, ACE United States 1,012 1, SUL AMÉRICA Brazil 1,427 1, BBVA Spain 1,455 1, MMM HEALTHCARE United States 1,096 1, GENERALI Italy 1,640 1, GRUPO MERCANTIL Venezuela 872 1, RSA United Kingdom 979 1, INBURSA Mexico 1,180 1, MCS United States 1,682 1, HORIZONTE Venezuela 631 1, Total Top 10 46,414 54, Total Top 25 66,962 76, Total Sector 103, ,

5 2012 of Insurance Groups in Latin America 2012 NON-LIFE Premiums (millions of Groups Country euros) % Market share 2012 (%) 1 MAPFRE Spain 5,535 6, PORTO SEGUROS Brazil 3,091 3, LIBERTY MUTUAL United States 2,579 2, BRADESCO Brazil 2,141 2, ZURICH Switzerland 1,905 2, ALLIANZ Germany 1,681 1, ITAÚ/UNIBANCO HOLDING Brazil 1,891 1, AXA France 1,334 1, MERCANTIL Venezuela 857 1, ACE United States 856 1, GRUPO NACIONAL PROVINCIAL Mexico 1,046 1, RSA United Kingdom 951 1, SUL AMÉRICA Brazil 1,202 1, GENERALI Italy 1,265 1, HORIZONTE Venezuela 618 1, QBE Australia 517 1, AIG United States 924 1, TALANX Germany LA OCCIDENTAL Venezuela SANCOR Argentina INBURSA Mexico QUÁLITAS Mexico TOKIO MARINE Japan SURAMERICANA Colombia CNP ASSURANCES France Total Top 10 21,869 24, Total Top 25 33,965 38, Total Sector 54,941 63,

6 2012 of Insurance Groups in Latin America 2012 LIFE Premiums (millions of Groups Country euros) % Market share 2012 (%) 1 BRADESCO Brazil 7,478 8, ITAÚ/UNIBANCO HOLDING Brazil 5,075 7, BRASILPREV Brazil 4,018 6, METLIFE United States 3,010 3, ZURICH Switzerland 2,770 2, MAPFRE Spain 1,798 2, CNP France 1,738 1, TRIPLE-S Puerto Rico 1,469 1, HSBC United Kingdom 1,270 1, SURAMERICANA Colombia 1,179 1, MMM HEALTHCARE United States 1,096 1, MCS United States 1,682 1, BBVA Spain BANAMEX Mexico GRUPO NACIONAL PROVINCIAL Mexico HUMANA United States NEW YORK LIFE United States ICATÚ Brazil CONSORCIO Chile CARDIF France FIRST MEDICAL HEALTH PLAN United States CORP GROUP VIDA Chile BOLIVAR Colombia ALLIANZ Germany AXA France Total Top 10 29,806 36, Total Top 25 39,237 47, Total Sector 48,240 57,

7 of Local Insurance Groups in Latin America 2012 TOTAL Premiums (millions of Market euros) 2011 Groups Country % share (%) BRADESCO Brazil 9,619 10, ITAÚ/UNIBANCO HOLDING Brazil 6,964 8, BRASILPREV Brazil 4,018 6, PORTO SEGURO Brazil 3,300 3, SURAMERICANA Colombia 1,761 2, GRUPO NACIONAL PROVINCIAL Mexico 1,820 2, TRIPLE-S Puerto Rico 1,579 1, SUL AMÉRICA Brazil 1,427 1, MERCANTIL Venezuela 872 1, INBURSA Mexico 1,180 1, Total Top 10 32,539 38, Total Sector 103, , of Insurance Multinationals in Latin America 2012 Groups TOTAL Premiums (millions of euros) Country % 2011 Market 2011 share 2012 (%) 1 MAPFRE Spain 7,333 8, ZURICH Switzerland 4,675 5, METLIFE United States 3,429 3, LIBERTY MUTUAL United States 2,691 3, CNP France 2,399 2, ALLIANZ Germany 1,986 2, AXA France 1,621 1, HSBC United Kingdom 1,794 1, ACE United States 1,012 1, BBVA Spain 1,455 1, Total Top 10 28,396 31, Total Sector 103, ,

8 2. Total The 25 largest insurance groups acquired a premium volume of 76,404 million, with a growth rate of 14.1% and market share of 63.1%. The significant growth that Latin American insurance markets have experienced over the past ten years is clearly illustrated by comparing this figure with the 24,640 million obtained by the 25 largest insurance companies in 2002, which represents an increase of 210%. The ten leading groups in the 2012 ranking continue to attract 45% of the premiums and are the same groups that led 2011 ranking, though with slight changes in the positions they occupy. The Brazilian groups continue to dominate the ranking, occupying four of the top ten spots, and three of them are bancassurance groups. The Vida Generador de Beneficios Libres (VGBL) insurance plan was once again the driving force behind the growth of the Brazilian insurance industry in 2012, reporting an increase of 6,414 million in premiums and a 37.3% hike compared with last year's figure. The six remaining groups are multinationals, four of them European and two from the United States. Since 2004 the top spot in the ranking has been held by Bradesco, which reaped profits of 10,479 million in While its growth was solid, this figure of 8.9% nevertheless demonstrates a certain slowdown compared with previous years which, coupled with the ever expanding Latin American market has resulted in a drop in its market share to 8.7%, four tenths below the 2011 figure. Another Brazilian company, Itaú/Unibanco, increased its premium volume by 29.1% thanks to the boost in Life insurance and recovered the second spot in the ranking, which had been held by MAPFRE since The latter group's premiums rose in 2012 by a robust 12.1%, and MAPFRE now occupies third place in the ranking with a premium volume of 8,223 million and a market share of 6.8%. MAPFRE premiums grew in every Latin American market except Argentina, due to the transfer of its activities in Health and Workers Compensation to the company Galeno following the agreement reached in October Brasilprev, in which Banco de Brasil and the Principal group have holdings, is one of the largest private pension companies in Brazil and the fourth largest insurance group in Latin America. In 2012 the sales of their VGBL product reached 6,215 million an astonishing growth of 54.7% causing them to jump one spot in the ranking and push Zurich down to fifth place. It should be borne in mind that the Swiss group took the fourth spot in the 2011 ranking after an agreement with the Santander group allowed Zurich to acquire 51% of the holding comprising Santander's insurance subsidiaries in Latin America. The five remaining groups, occupying spots six to ten, remain the same as in the 2011 ranking. Most of the changes have occurred between the 11th and 25th positions. The most significant are as follows: 8

9 The Ace group climbed from the 22nd spot it held in 2011 to 16th place this year following its announcement in May 2012 of the acquisition of ABA, one of Mexico's largest Non-Life insurance companies. Triple-S rose to the 13th spot in the classification (previously ranked at number 17) after taking over the healthcare administration services for the Government of Puerto Rico in the regions of the country that were previously run by MCS. This same fact explains why MCS has plunged from 14th place to the 24th spot. Generali saw its premiums fall by 20% after reaching an agreement with Mexico's Banorte to sell its 49% share in the company (in previous editions of the ranking Banorte's premiums were added to those of the Italian group) and it consequently dropped five spots in the ranking. France's AXA climbed two notches to 14th place (from 16th last year), benefiting from HSBC's descent. In March 2012 the two groups reached an agreement allowing AXA to acquire HSBC's Non-Life business in Mexico. As a result, HSBC slid down three places in the total ranking to the 15th spot. Turning to new entries, two Venezuelan groups joined the ranking this year: Mercantil and the state-owned Horizonte. Mercantil's profits rose by 48% thanks to its booming Automobile branch, while Horizonte grew by 64% following the excellent performance of its group healthcare insurance. The entrance of these groups bumped Germany's Talanx and the USA's AIG out of the classification. 3. Non-Life Latin America's 25 largest insurance groups in the Non-Life sector earned close on 39,000 million in premiums in 2012, which represents an increase of 14.4% against last year's revenue figures. In 2002 the premium volume of the 25 largest insurance groups in 2002 was 15,097 million, which means that the profits of the largest insurance companies in this segment have multiplied by 2.5 in the last ten years. In both years, the market share has been 61.5%. MAPFRE has held the top spot in the Non-Life ranking since 2005, during which time it has seen its share rise from 6.1% to 9.5%. Porto Seguros occupies second place in the ranking with 3,249 million in premiums and a market share of 5.1%. It is important to remember that the Brazilian group has been climbing up the Non-Life ranking since 2009, following its agreement with Itaú/Unibanco to unite the two companies' Automobile and Home insurance businesses. The third spot is held by Liberty, which has acquired a market share of 4.7% after seeing its premiums rise by 14.6% thanks excellent performance in Chile and its largest market, Venezuela. In 2012 Liberty purchased the company Cervantes from Banco Internacional after constitutional and legal changes in Ecuador forced banks to withdraw their investments in the insurance industry. 9

10 Bradesco has held on to the fourth spot, followed by Zurich, which has climbed a notch in the classification following an extraordinary 17% growth in its premiums. According to the group, this growth is primarily owing to the contribution of the insurance businesses acquired from the Spanish bank Santander, the underlying increase in the automobile lines in Brazil, Mexico and Argentina, and the revenue from insurance product sales through retail establishments in Brazil. The largest growth in premiums for the Non-Life branches was experience by two groups that have joined the classification this year: La Occidental (107.7%) and QBE (95.2%). QBE shot straight to 16th place in the ranking and La Occidental to the 19th spot. The Australian group QBE received authorization from the Chilean Securities and Insurance Supervisor in October 2011 and began operating in January The group has also grown by making acquisitions: in December 2011 it announced the purchase of the company Optima, a Property and Casualty insurance company in Puerto Rico, and in March 2012 it carried out the largest transaction in terms of income volume by purchasing HSBC La Buenos Aires, thus becoming the third largest insurance group in Argentina. Meanwhile, the growth of Venezuelan company La Occidental in the Miscellaneous, Group Healthcare and Fire branches has made it one of the top five insurance groups in Venezuela. Mercantil, Ace and Horizonte have also shown significant growth in their premiums and, consequently, in their position in the ranking: all of them jumped seven spots. 4. Life Once again Latin America's 25 largest Life insurance companies have proven to be more dynamic than their Non-Life counterparts, with a growth of 19.9% and a premium volume of 47,061 million. Ten years ago the 25 largest groups earned 11,240 million, demonstrating the astonishing growth experienced by this branch, which has more than quadrupled and has outperformed the Non-Life branch. The concentration has also increased, rising from 70% in 2002 to 81% in Three Brazilian bancassurance companies top the ranking: Bradesco, Itaú/Unibanco and Brasilprev. All three have seen significant growth in premiums boosted by VGBL insurance plans. They are followed by four multinationals, three of which are European: MetLife, Zurich, MAPFRE and CNP. There have been hardly any changes among the top ten groups compared with the 2011 classification and only a slight increase in their market share, which now stands at 63.2% (compared with 62.6% in 2011). Of the top ten, only the MCS group lost ground, falling from the eighth to the 12th spot after losing its contract with the Government of Puerto Rico to run the Mi Salud program. However, the Colombian 10

11 group Suramericana was classified among the region's top ten Life insurance companies. Finally, AXA climbed back to the 25th slot after being pushed out of the Life ranking in Local Groups and Multinationals There has been no variation in the composition of the local group ranking in Four Brazilian groups occupy the top slots, led by Bradesco. Suramericana and Mercantil have each climbed one notch while the Mexican Grupo Nacional Provincial and Inbursa have both dropped a spot. MAPFRE continues to lead the multinationals classification in Latin America, followed by Zurich and MetLife. AXA has climbed from the tenth to the seventh spot, and Ace and BBVA have joined the ranking, pushing out Generali and MCS. Seven of the ten largest multinationals established in the region are European. 11

12 6. Methodology The information contained in this report was prepared using the same method as previous years. Data was obtained from information published by the insurance authorities in the various countries and the premium volume for each group represents the sum of the premiums issued in each country. The mergers and acquisitions announced over the course of the year were taken into account when calculating the data. It is essential to emphasize that there is a certain complexity when preparing reports of this nature due to the fact that what constitutes Life and what constitutes Non Life varies from country to country. In general, and whenever possible, the Healthcare and Accident branches have been included in the Non-Life branches, though this criterion cannot apply, for instance, in Puerto Rico, where the Disability (Healthcare) branch is considered to fall within the Life insurance business. In fact, the largest insurance companies for Life and Healthcare in Puerto Rico are primarily Healthcare insurance providers, and some of them rank among the 25 largest Life insurance groups in Latin America. The Brazilian figures, on the other hand, do not take into account the contributions from "Previdencia Privada" or healthcare insurance premiums, which are controlled by the Agência Nacional de Saúde Suplementar (ANS). Similarly, the figures for Argentina do not include "Rentas Vitalicias" and Retirement insurance, and Pension plans are excluded in the case of Mexico 1. The average yearly conversion rate was used to convert data from other currencies to Euros. Growth rates are calculated on income in Euros. The rankings can be consulted online in the electronic publications section of FUNDACIÓN MAPFRE's Insurance Sciences Institute at 1 For this reason and due to the differences in the composition of the Life and Non-Life branches, the total volume for Life and Non-Life premiums presented here differs from the figures published by FUNDACIÓN MAPFRE in the report The Ibero-American Insurance Market. 12

RANKING OF INSURANCE GROUPS

RANKING OF INSURANCE GROUPS IN LATIN AMERICA 2014 Insurance and Social Protection Area November 2015 TABLE OF CONTENTS 1. Introduction 2. Total 3. Non-Life 4. Life 5. of local and international insurance