The Colombian government's recently unveiled infrastructure programme for highway construction over the next 10 years is tipped to raise demand for surety products owing to government contracts requiring surety insurance to protect public resources.
Higher demand of these types of P&C insurance coverage will help insurers absorb their fixed costs, thereby improving underwriting results and reducing insurers' reliance on investment yields to sustain their profitability, Moody's has claimed in a report.
According to Colombian financial regulator Superfinanciera, premiums for surety and construction accomplishment risk constituted 11% of Colombia's total P&C insurance premiums in 2012, with more than 25 companies participating in these insurance lines.
Through the Autopistas para la Prosperidad programme, the Colombian government plans to spend US$7.4 billion (14 trillion pesos) over the next decade on infrastructure to upgrade and construct more than 8,000km of road and more than 100 tunnels via concessions to private companies.
Higher demand of these types of P&C insurance coverage will help insurers absorb their fixed costs, thereby improving underwriting results and reducing insurers' reliance on investment yields to sustain their profitability, Moody's has claimed in a report.
According to Colombian financial regulator Superfinanciera, premiums for surety and construction accomplishment risk constituted 11% of Colombia's total P&C insurance premiums in 2012, with more than 25 companies participating in these insurance lines.
Through the Autopistas para la Prosperidad programme, the Colombian government plans to spend US$7.4 billion (14 trillion pesos) over the next decade on infrastructure to upgrade and construct more than 8,000km of road and more than 100 tunnels via concessions to private companies.
