The insurance sector in Guatemala faces a possible rearrangement in its supply and demand after the recent provision that establishes the obligation to have traffic accident insurance with coverage to third parties. This measure will charge validity as of May 1, 2025.
As companies analyze strategies to adapt, Hermann Girón, president of the Guatemalan Association of Insurance Institutions (AGIS), indicated that next week could be key, since they will send a proposal to the Superintendence of Banks (SIB), aligned with the new regulation.
According to Girón, they did not know that the new regulations would be officers, so they speed up the elaboration of a proposal that will offer adequate prices to the minimum coverage established in the government agreements published on March 16, 2025.
“Today there are complete civil liability insurance that have enough coverage to comply with the law, but the insurance sector is preparing insurance that complies exactly what government agreements require,” he said.
Girón added that they hope that in the short term these products will enter the SIB, be approved and “make very quickly available to the public.”
“In the next two or three weeks, insurance, points of sale, insurance intermediaries (agents and corridors) and self -service tools will be available so that Guatemalan customers can self -try, probably at the end of next week,” he added.
Impact on supply and demand
According to the Executive, the regulatory adjustment of mandatory insurance will have effects on both products diversification and policy accessibility.
He affirmed that current insurance in the market meets the needs demanded by the new agreements, even with excess coverage.
“We are seeing a possible increase in the offer of specialized insurance, since some companies will seek to differentiate themselves in a more regulated market,” he explained.
On the other hand, sector analysts warn that demand could experience mixed behavior. While certain segments, such as life and health insurance, could be strengthened, and others related to general coverage could face a contraction due to tight costs.
“While the final consumer can access better options, prices and requirements can also be modified, affecting market dynamics,” said the expert.
The insurance required by law are only one of the coverage offered by insurers. According to Girón, prices are expected to be more accessible and competitive, since this insurance is mandatory and widely distributed. However, he clarified that the existence of these insurance does not reduce the risks of road accidents.
Current market panorama
Regarding the current situation, Girón estimated that 100 thousand motorcycles are secured with civil liability policies, whose coverage is probably insufficient to comply with the requirement of the law.
The amounts defined in the government agreements are based on the minimum monthly salary for non -agricultural activities in the economic constituency 2 (CE2), which corresponds to Q3 thousand 800.60.
According to these agreements, the minimum coverage required for vehicles varies according to their type:
- Motorcycles: 100 minimum salaries of CE2, approximately Q380 thousand
- Cars: Q760 thousand
- Loading and transport vehicles of people: Q1 million 520 thousand
Girón indicated that many vehicles already exceed the minimum coverage required by law, so it will be the responsibility of each contractor to verify if their insurance meets the established amounts and, if not, adjust it before May 2.
“I think that a large number of motor vehicles already have coverage higher than the Q760 thousand, and it is likely that many loading vehicles will exceed the coverage of a million and a half of Quetzales established by law, but it will be the responsibility of each contracting party to verify if its insured sums are lower than those amounts,” he explained.
Requirements to opt for insurance
The requirements to hire civil liability insurance are accessible, according to Girón. No vehicle inspection is required nor are there restrictions by age or seniority of this.
In addition, he explained that the only thing necessary is for the person to have a valid license that corresponds to the type of vehicle that will ensure and that is up to date with circulation taxes.
“If the person has a license and the vehicle circulates with their taxes paid, you can hire insurance. There are no special or seniority requirements,” he said.
During the interview, the concern that certain groups, such as those with less resources or owners of old vehicles, could face barriers to access the insurance.
To this, the AGIS representative replied: “Do you think that a person run over by a recent car or a lot of value has more rights to recover than a person hit by an old car? Or that the pilot with less resources has less rights?”
The answer to the approach was clear: “This is a mandatory insurance, and in Guatemala the hiring of insurance is free and competitive. Today, those interested can choose between a variety of insurers, both public and private, which will offer coverage at different prices, adapting to the needs of various drivers and types of vehicles.”
Girón emphasized that, being a mandatory insurance, there will be a standardization in the offer, but the market will remain competitive, with accessible prices for a wide range of drivers and vehicles.