23 Apr 2020
Posted in Insurance
Huge drops in vehicle registration and tourism to hit Spain’s insurance market
Leading data and analytics company GlobalData has revised its insurance market forecasts for Spain to reflect the tough economic conditions faced by the country. Spain’s essential tourism industry grinding to a halt amid the COVID-19 pandemic will spark cancellations, while there has been a 30% drop in car sales in 2020. GlobalData’s forecasts for the insurance sector now show slower compound annual growth rate (CAGR) growth of 2.6% (from 3.3%), in total market size, up to 2024.
Deblina Mitra, Insurance Analyst at GlobalData, comments: “There will not be negative growth in any year up to 2024, but growth in 2020 is hit particularly hard. Initial forecasts expected the overall market to grow by 2.9%, but this has fallen to just 1.0%, due to the impact of COVID-19.”
Areas of concern for the industry are a 30% drop in vehicle sales in 2020 and the significant impact to the agricultural sector and the sealing of international borders, which led to a collapse in tourism.
Mitra continued: “The absence of migrant workers is expected to impact agricultural processes such as harvesting and the processing of fruits and vegetables. The increased potential of agricultural losses is expected to result in a rise in insurance claims for production in 2020, however, direct aid of €4.3m from the Common Agricultural Policy (CAP) is expected to encourage farming and minimize losses.
“Losses may also be minimized as UNESPA (Spanish Insurance Association) has mandated all domestic insurers to continue offering regular life, health and travel policies during the pandemic.”