Background on the Speaker and His Role
Héctor Santana Suárez, the head of the Seguros, Pensiones y Seguridad Social unit under México’s Secretaría de Hacienda y Crédito Público (SHCP), is responsible for overseeing the country’s insurance and social security policies. His recent statements highlight Mexico’s efforts to secure financial stability in the face of natural disasters.
Upcoming Renewal of Disaster Insurance
As the rainy and hurricane season begins, Santana Suárez confirmed that Mexico will renew its disaster insurance policy within a month and a half through a public tender process. This move ensures the government’s financial readiness to respond to emergencies and avoid resource shortages post-disaster.
Current Status of the Renewal Process
- SHCP is currently in the market research phase for the upcoming licitation.
- If there aren’t enough interested parties, a leading insurance company will likely take on the contract.
- Santana Suárez mentioned that adjustments have been made to expedite the process, learning from past delays.
Additional Insurance Measures by the Mexican Government
Beyond the disaster insurance, Santana Suárez revealed that Mexico is exploring a parametric insurance policy against excessive rainfall in collaboration with other Latin American countries.
Mexico’s Comprehensive Risk Strategy
Santana Suárez outlined four distinct levels in Mexico’s integrated risk management strategy:
- Four catastrophe bonds: worth $595 million, allocated for the most severe events.
- Two bonds are for earthquakes, and the other two cover hydro-meteorological phenomena (one in the Atlantic Ocean and another in the Pacific Ocean).
- Disaster insurance: activated for less severe events, providing coverage of 5,000 million pesos. This policy is set for renewal soon.
- A budget line item of 18,000 million pesos for disaster response within the Presupuesto de Egresos de la Federación (PEF) 2025.
- Governmental federal agencies’ insurance: acquired through consolidated purchases, offering broader protection against frequent yet less severe events.
Key Questions and Answers
- What is the purpose of renewing the disaster insurance policy? To ensure financial stability and readiness in responding to natural disasters.
- Who is responsible for overseeing Mexico’s insurance policies? Héctor Santana Suárez, the head of Seguros, Pensiones y Seguridad Social unit under SHCP.
- What are the four levels of Mexico’s integrated risk management strategy?
- Four catastrophe bonds worth $595 million for severe events.
- Two earthquake bonds and two hydro-meteorological bonds (Atlantic and Pacific Oceans).
- Disaster insurance for less severe events, covering 5,000 million pesos.
- A budget line item of 18,000 million pesos for disaster response within PEF 2025.
- Insurance for governmental federal agencies acquired through consolidated purchases.
