In Ecuador, vehicles are more insured, group life (which includes the credit life that a financial institution hires to insure all its debtors) and properties against fire and allied lines that include earthquake damage. They are compulsory insurance tied to the purchase of cars and houses on credit.
This shows that the assurance culture is limited. In 2018, premiums – what policyholders pay to private companies for coverage – totaled $ 1,689 million, 4.2% more than in 2016, when the earthquake occurred.
Insurers, on the other hand, paid claims for $ 783.8 million in 2018, 46.4% of what was collected last year. The highest percentage occurred in 2016 due to the effects of the earthquake when claims paid were 69.4% of premium collections.
The share of insurance with respect to the Gross Domestic Product (GDP) is down, a reflection of the economic recession, says Otón Chávez Torres, president of the Federation of Insurance Companies of Ecuador (Fedeseg).
Premiums in 2018 represented 1.54% of GDP, in 2013 it was 1.74%. Chávez assures that there has been an increase in fire policies and allied lines in the areas most affected by the earthquake. “But there is little concern in hiring protection,” he says.
Policyholders have already paid $ 897.8 million until last June and insurers covered claims for $ 394.2 million (44% of the proceeds) during this year. Health and life insurance rose 10% in 2018, but those that protect assets only 1%.
Katty and Daniel, both 30, faced the need to purchase private health insurance when their first child was a month old and had to be hospitalized with diarrhea and bloody stools. “They couldn’t find what I had and only in days we spent $ 400,” she says.
Remember that no one got the diagnosis until they were told you had a food allergy and reflux. A month after this emergency, they both took out insurance for their son at a cost of $ 250 per month. After four years, they pay $ 120 today and the couple also secured $ 230 more. “With poor public health service, it is a necessity,” says Katty.
With the validity of the insurance law since October 2016, there was a rebound in the purchase of medical plans, says Max Celi, commercial manager in Guayaquil of the BMI insurer. “Someone with hypertension was not insurable before 2016, now we are required to offer them a policy.” But it does not reach the levels of Spain, where 27% of the population has private health insurance. In Ecuador it is 6%.
For Celi, the current problem is that in the country these benefits have not yet been “massed” to contain the growth in medical costs. “The Metropolitan Hospital (in Quito) has a Da Vinci robot that operates automatically and an operation can cost you about $ 20,000, but in Colombia, with the same equipment, it costs $ 8,000. However, the Metropolitan, due to its size, the services it provides and its demand, somehow regulates prices in Quito ”.
On the other hand, according to Celi, in Guayaquil there is no hospital that is a reference, so medical costs are up to 45% more expensive than in the capital: “Insurance companies are better off paying for their clients’ airfare and that are operated in Quito. Although if it is an intervention with the Da Vinci, it is better for the patient to travel to Colombia and we pay for their stay, tickets, mobilization ”.
Da Vinci’s operations include complex procedures such as tumor removal with micro incisions.
Katty and Daniel have a mortgage, so they have credit life insurance. Thus, if the owner dies, the debt is settled and the relatives inherit the real estate without the obligation to continue paying it.
Chávez explains it. “When paying the debt it goes down, if the owner dies, the bank charges the insurance for the balance of this and if there is a difference this also remains for the family.” Hence, it is important to establish the beneficiaries. “Otherwise, that becomes part of the assets left by the deceased,” he adds.
Insurers are not required to search for life insurance beneficiaries when the insured dies. Today there are ways to find out, since notifications to the owner’s emails or cell phone are activated due to non-payment.And there is how to prove that the cause of non-payment was the unforeseen death of the owner and the beneficiaries can claim regardless of the time that passes, says Dennis Vaque, commercial manager of Giros de Seguros S.A.
The low penetration of insurance responds to the limited purchasing power. Excessive regulation, says Chávez, slows the expansion of coverage to the most vulnerable sectors.
In the market everything is insurable, he adds, it is a matter of measuring risk. In Ecuador there are insurance for accidents that leave temporary or permanent disability aimed at protecting the parts of the body that are work tools such as the hands of surgeons or the limbs of footballers.
“Accidents and disability for professions of up to a million dollars can be done here in Ecuador, but if they are higher figures, reinsurers are used abroad,” says Chávez. “There are specialized insurance for athletes and other professions to cover certain circumstances and risks,” says Patricio Salas, secretary of the Fedeseg.
Soccer teams insure their squad. These benefits may be included in individual life and accident policies. In 2018, $ 30.2 million were paid for the first and $ 99.1 million for the second. The Pegasus teams, the so-called first Ecuadorian satellite, had insurance coverage and at the time they insured the condors. (I)
Source: El Universo, Xavier Ramos, September 29, 2019
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