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American Brokers Find Mexico Can Bring Increased Prosperity To Their Portfolios American companies and individuals with exposure in Mexico are best served by continuing to work with their American agent or broker (brokers). There is no reason for agents to risk losing clients, potential clients, or control of a portion of an account because they cannot handle exposures in Mexico. In fact, many American brokers find themselves with opportunities to handle the American portion of an account as a result of having been the only producer to offer to review the clients Mexico insurance program. The advent of Internet technology and sophisticated communications such as fax and email gives clients virtual access to your office from anywhere in the world. Clients with exposures in Mexico would certainly prefer to work with their Canadian brokers, who understand the clients, share their sense of urgency and is accustomed to providing excellent customer service. Brokers can access the Mexican insurance market by using one of a handful of specialty wholesalers in the US who are contracted with Mexican insurers and have affiliate broker relationships in Mexico. These wholesalers provide coverage for American corporations and individuals with exposure in Mexico and are familiar with the Mexican market. Opportunities for American brokers in Mexico are the result of several factors: The influx of American capital and management in the Mexico tourism industry has been substantial, enabling American based corporations to develop and manage hotels, recreational vehicle parks, condominium complexes, and other services. The growth of the maquiladora industry has been phenomenal. More and more American corporations are moving production facilities to both Mexican border cities and mainland Mexico. Millions of dollars of goods are transported from US to Mexico, and vice versa, on a daily basis. This trade has greatly increased the need for broad, compatible cargo/transportation and commercial trucking coverages for both American truckers and shippers operating in Mexico, and Mexican truckers delivering finished goods to warehouses in the US. Infrastructure improvements are prompting greater numbers of American based contractors to perform work in Mexico. Thousands of American executives, tourists, retirees, and expatriates travel to and own homes in Mexico. These clients need personal lines and specialty expatriates health, medical, and emergency evacuation coverages in Mexico in addition to legal aid services, which can be purchased as an endorsement on most Mexican liability policies. Issues that American brokers placing coverage in Mexico should be aware of include: Mexican law requires that primary insurance in Mexico be placed with an admitted Mexican Insurer. Although difference-in-condition coverage is available from American carriers. Mexican policy forms and terms and conditions are often quite different from those for corresponding American coverages. Be sure to obtain English translations of all policy forms prior to binding coverage. Approximately 50 insurers are admitted in Mexico. With the relatively small number of insurers in Mexico, the financial strength and service standards of Mexican underwriting companies varies dramatically. Interestingly, many U.S. insurers with Mexican operations have only a handful of employees in Mexico and may not provide the same level of service, risk management, and coverage lines as Mexico's largest insurance companies. The Mexican market is property driven. In fact, one of the most difficult coverages to place in Mexico today is transit/cargo coverage. Liability exposure as we know it in the US does not exist in Mexico. Although Mexico has had an impressive comeback from the peso crisis of a few years ago, the potential for peso fluctuation remains. Therefore, all policies are denominated in U.S. Dollars. Mexico, our southern NAFTA partner, provides an opportunity for Canadian brokers, not only to round out accounts but also to develop new business opportunities. Based on an article written by Jim Labelle. |
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