At the end of the fourth quarter of 2021, the bonding sector reported an increase in its direct premium, going from 11,170 million pesos to 11,530 million pesos, that is, it obtained a real annual growth of 3.2% compared to December 2020, this driven mainly by the administrative branch, as reported by the National Insurance and Bonding Commission (CNSF).
The dependency indicated that in what refers to the behavior of the different branches that make up the Surety operation, the Fidelity branch presented a real decrease of 14.1% while the Judicial Surety branch and the Credit branch presented real growth of 22.9 %, and 4.2% respectively, compared to the results of the previous year, the main driver of Bonds was Administrative Bonds, which grew 8.6 percent.
According to a statement, the lack of dynamism in the recovery of investment in the economy, particularly in the 1.4% increase in investment in construction, slowed down the growth of the sector.
Likewise, it is pointed out that the behavior of the accident rate was varied, the branch of Administrative Bonds, which are linked to construction, presented a growth of 171%, in contrast to Fidelity Bonds, which showed a decrease of 23.5% mainly caused by due to low sales in postpaid telephone lines where its main provider contracted its placement by 91.5 percent.
With respect to the profit of the entire surety operation, it contracted by 13.2%, as a result of the increase in the claims of the Administrative Bonds that caused the profit of this branch to drop 53.6%, and despite the contraction in the issuance, Fidelity bonds raised their profits by 73.3 percent.
It is indicated that although the sector shows adverse impacts in both claims and profit, it continues at adequate levels of solvency, sufficiency and liquidity, and also maintains its operability through remote work. Advances in vaccination are expected to gradually help stabilize economic activity and push the sector back to the growth levels seen before the pandemic.
The sector presented a Combined Index of 69.5%, a figure 3.5 pp higher than that reported in 4Q 2020.