In the last week, there have been several news stories about the recent island-wide power outage in Puerto Rico, the tenuous condition of Puerto Rico’s power grid, and the fact that hurricane season is right around the corner. Last Wednesday, a construction vehicle removing a fallen electrical tower got too close to an energized line and caused an electrical ground fault that led to an island-wide blackout. Luckily, power was not out across the island for long, but the outage once again drew attention to Puerto Rico’s efforts to rebuild following Hurricane Maria. Puerto Rico faced difficulties with its power grid even before Hurricane Maria made landfall, but Maria’s high winds and flooding damaged 75 percent of the island’s distribution lines. Despite the progress that has been made since Maria struck, it is clear that Puerto Rico has not fully recovered from Maria’s devastation.
Wednesday, May 2, 2018
Wednesday, April 25, 2018
More (Chinese) Money, More Problems: Will Increased Chinese Investment In Latin America Have Unintended Consequences?
Data from the Economic Commission for Latin America and the Caribbean reveals that Chinese foreign direct investment to the region increased from a total of $5 billion during the timeframe from 1990-2009 to an average of $10 billion per year between 2010 and 2012. In 2016, China became the second largest investor in Latin America after the U.S., and in 2017, China represented around 15% of the total foreign direct investment in the region. New Chinese acquisition appears to focus on a few sectors, such as energy and mining. Argentina, Brazil and Peru are the biggest beneficiaries, having received more than 80% of overall Chinese investment since 2005. Brazil alone has received approximately 55% of Chinese investment in Latin America during this timeframe according to data from the World Economic Forum on Latin America. It is anticipated that China’s penetration into the Brazilian economy and the economies of other countries in the region will continue, which begs the question: what other consequences will this rapid grown acceleration have for the region? It seems likely that the ripples will be felt in the insurance industry. With the increase in industry and market expansion, an increase in the demand for energy coverage in these markets, and a larger number of claims, would also be expected.
Friday, March 30, 2018
In the six months since Hurricane Maria devastated Puerto Rico, much progress has been made. Water service has been restored to 99% of the island and electricity to 93%. Of the total losses in the Caribbean from Maria, about 85% are in Puerto Rico, which the local government estimates at $100 billion. Insured losses are estimated between $40 and $85 billion.
Wednesday, January 24, 2018
2017 saw approximately USD 330 billion in losses from natural disasters worldwide, of which around USD 135 billion were insured, according to a Munich Re report. It was the second costliest year on record, only surpassed by 2011. Latin America was no exception to the trend, as a number of natural catastrophes hit the region last year.
Thursday, November 9, 2017
Insurance regulations can influence the results of a business to the point of either facilitating an endeavor or making it hardly viable. Traditionally, insurers and reinsurers dealt with Latin American regulators on a one-on-one basis. That is still the case as a general rule, but in more recent times steps have been taken towards regional integration.
Thursday, October 26, 2017
As recovery and rebuilding efforts drag on in Puerto Rico, Hurricane Maria’s impact on Big Pharma is radiating across the U.S., and around the globe as the dozens of drugs manufactured in Puerto Rico become scarce. Maria brought drug manufacturing to a screeching halt in Puerto Rico, where about 10 percent of all drugs prescribed in the U.S. are made. The FDA is focused on about 40 drugs it expects to be in short supply, including 13 that are made only in Puerto Rico.
International insurers and reinsurers are likely to retain legal services from local attorneys in 29 Latin American countries. Consumers of legal services in Latin America often question whether the rules of professional conduct of these foreign suppliers are comparable to those in other jurisdictions, such as the UK or the US.