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(From Life Insurance International)
Latin America may not be the most active area for foreign life insurance groups looking to expand their international operations, but Mexico stands out as one market that continues to attract the interest of big overseas groups. Charles Davis reports Mexico's insurance industry is still relatively small and underdeveloped, but as incomes and the nation's GDP continue to improve, so does demand for insurance products.
Indeed, the population of Mexico, which stands at 100 million inhabitants, of which 18.2 million are in Mexico City alone, makes the country a significant market.
In July 2000, after 71 years of virtual one-party rule by Partido Revolucionario Institucional, national elections resulted in a new ruling party, the Partido Accion Nacional (PAN), headed by Vicente Fox.
PAN ushered in a democratic platform with promises of a stable economy for Mexico. In addition, the country accepted the provisions of the North American Free Trade Agreement (NAFTA) calling for Mexico to gradually remove enterprises from state control and allow more foreign participation in its financial sector.
Although the Fox regime has been less successful than many observers had hoped in altering the local economy, the burgeoning market reforms have continued to draw foreign investment to the financial sector. The banking and insurance sectors have been steadily expanding, bolstered by …