The Competition Superintendence (CS) began a study to determine the competition conditions under which the insurance sector of El Salvador operates.

1. Press Release C-20-10
th
El Salvador, August 19 , 2010
Competition Sector Studies
CS Analyzes Competition in the Insurance Sector
The Competition Superintendence (CS) began a study to determine the competition
conditions under which the insurance sector of El Salvador operates.
The CS has initiated a study to determine the competition conditions under which
“Pursuant to the the insurance sector of El Salvador functions. Said study shall be conducted the
importance that the Argentinean consultants Gustavo Ferro, Esteban Greco, and Diego Petrecolla, and
insurance sector has is expected by be finalized in January 2011.
secured in the national
economy, the CS has The main purpose of the aforementioned study is not to begin a sanctioning
considered the need to procedure but rather to diagnose and determine the competition conditions under
deepen the knowledge which the above cited sector operates and, simultaneously propose the adequate
of how said sector measures to strengthen and improve the various stages of said market´s value
operates and its chain.
competition
conditions”, informed The CS will analyze the legal framework in force, the trade and management
Mario Cruz, Studies strategies, the commercial practices, the profit margins, the licenses granted to
Intendant of the exploit the services, and the price policies, the calculation of internationally
Competition accepted indexes to measure these markets´ competition and contestability levels,
Superintendence. as well as the identification of the conditions which might promote anticompetitive
practices, amongst others.
The CS has already carried out approachment meetings, has interviewed more than 20 participants in the
aforementioned market, amongst these: insurance companies, brokers, associations, consumers, and regulators.
In Addition, the CS will request legal, economic, financial, and commercial information to said participants,
according to each case, which will be handled by the institution with strict confidentiality criteria and mechanisms
Characteristics of the market of the insurance sector in El Salvador
Pursuant to the importance that the insurance sector has secured in the national economy, the CS has
considered the need to deepen the knowledge of how said sector operates and its competition conditions.
In El Salvador the insurance sector was established in 1906. As the country´s economic activity increased, the
needs to cover risks resulted in an increment of the companies dedicated in offering insurance services.
Likewise, the legal framework has evolved; currently the Financial System Superintendence is responsible of
supervising said sector.
Since 2006, the growth of the net premiums amounts has been positive. In 2008, the aforementioned growth
totaled US$461.9 million, US$47.2 million more than in 2007 (11%). Said increase has been fostered by the
segments of the guarantee insurances with a growth rate of 33%, followed by pensions insurances with a 30%
increase.
Edificio Madreselva, 1er Nivel, Calzada El Almendro y 1ª Ave. El Espino, Urb. Madreselva, Antiguo Cuscatlán, El Salvador.
E-mail: contacto@sc.gob.sv - www.sc.gob.sv

2. The insurance companies offer the following services: life insurances, insurances to individuals for life, pensions
insurances, pensions, health and accidents insurances, fire and related areas insurances, car insurances, and
other general insurances (such as: maritime and air transportation), and guarantees.
In 2008, the density indicator (premiums/IGP) was US$75.42 per person and the penetration rate (premiums
/number of inhabitants) was 2.09%.
Value Chain
The economic agents involved in this sector are authorized by the Financial System Superintendence, and form
the following groups:
• Insurance companies: These operate in the insurance, reinsurance, guarantees, supporting guarantees
areas. Towards the end of 2009, the authorized private companies totaled 20.
• Insurance brokers: They can be independent insurance agents or brokers, offering the insurance
services rendered by the authorized companies. Currently, 1.055 individuals and companies have been
authorized as insurance brokers (updated in December 2008).
• Foreign reinsurers and insurance brokers: Forty five reinsurance companies have been authorized, 18
of them are foreign insurance brokers.
About the consultants
• Mr. Gustavo Adolfo Ferro: Master and PhD in Economy from the “Universidad del CEMA” in Buenos
Aires, Argentina; professor-researcher for the “Instituto de Economía”; senior professor for the Economy
Department of the “Universidad del CEMA” (Economy of Regulation, Public Finances, and Macro
Economy); Associate researcher for the CONICET; and, consultant in regulatory topics (financial and
public services).
• Mr. Esteban Manuel Greco: Master in Economy from the Postgraduate Regional Training and Research
Program in Public Policies of the “Instituto Torcuato Di Tella”‐Interamerican Development Bank;
independent consultant since 2001; partner of “GPR Economía” since 2009. Specialization: Economy of
Regulation and Defense of Competition.
• Mr. Diego Petrecolla: PhD in Economy from the Universidad of Illinois of Urbana‐Champaign (UIUC);
Specialization areas: International Commerce and Economic Development; Master of Science in
Economy from the UIUC; Chairman of “GPR Economía”: consultant company in Defense of Competition
and Regulation of Infrastructure Public Services; Director of the “Centro de Estudios de la Unión
Industrial Argentina”; Counsel of the Chairman of the “Banco de la Provincia de Buenos Aires”; Director
of the “Centro de Estudios Económicos de la Regulación (CEER)”.
Background
Within its 2006-2010 Operational Plan, the CS included the execution of various studies on the competition
conditions of different sectors of the Salvadoran economic activity. Currently, the institution is conducting a study
on the competition conditions of the cheese industry and of credit and debit cards. Furthermore, the CS is
coordinating a regional study on the pharmaceuticals sector. In the past, the CS has carried out studies on liquid
fuels, liquid petroleum gas, eggs and chickens, electricity, telecommunications, terrestrial cargo transportation,
rice, sugar, dairy, fertilizers, iron, amongst others.
Edificio Madreselva, 1er Nivel, Calzada El Almendro y 1ª Ave. El Espino, Urb. Madreselva, Antiguo Cuscatlán, El Salvador.
E-mail: contacto@sc.gob.sv - www.sc.gob.sv