A departure of any significant number of reinsurers from El Salvador would likely decrease insurance capacity and increase insurance premiums for many purchasers. Even more significantly, however, such a result would leave the local market in serious peril in the event of another significant catastrophe. By way of illustration, reinsurers are expected to pay nearly 38% of the insured damages incurred from Hurricane Ida and 97% of the insured damages from this year’s earthquakes in January and February. Reinsurers have also been instrumental in funding reconstruction in El Salvador after previous hurricanes such as Hurricane Stan. In the absence of such risk transfer, there is serious question whether local Salvadoran insurers could sustain a major natural disaster.
If you would be interested in learning more about the Salvadoran and/or Latin American (re)insurance markets and/or regulatory environments, please click the “Email the Editor” button and provide your contact information for follow-up by an EAPD attorney.