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Mexico to tackle problem of uninsured cars

Believe it or not, three out of four Mexican drivers are in a car without any insurance. The average inhabitant of Mexico doesn’t mind the lack of insurance, he’s pretty sure that he’s a good driver. Accidents will happen to someone else, but not to him. President Enrique Pena Nieto has now declared war on the driving behavior of his compatriots, especially the mentality that it is ok to take to the federal highways without insurance.

In April of this year, the Mexican Congress approved a proposal to give the police more power to control car owners. Their task is gigantic: according to estimates some 75% of all drivers are on the road in an uninsured car. This situation is barely sustainable – when accidents happen problems will arise. Who will pay the bills when one of the drivers (or maybe even both of them) is uninsured?

The insurers are wondering what is going to happen next. When the police can get a grip on the situation, there will be a huge market available for selling auto insurance contracts. Mexican insurer Qualitas Controladora SAB and foreign players such as AXA and Grupo Financiero Inbursa SAB are impatiently awaiting the next steps of the Mexican government in taking control of cars driving on the federal Mexican highways, with or without having paid their insurance. A massive potential market share is waiting for the insurers.

Mexico is determined to solve the problem of the lack of car insurance on the highways, but Paris and Rome weren’t built in a day. For the time being the government will be turning a blind eye to cars driving without insurance on the local streets, but someday the government will also crack down on the local aspect of the problem of uninsured cars. And herein lies another opportunity for the big insurance companies.

15/07/2014  |  Tim Harrup

TAGS : Mexico Insurance 

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