Insurers Push Personal Retirement Plans After IMSS Modalidad 40 Changes, Digi Mart USA News (Mexico): Following changes made by the Instituto Mexicano del Seguro Social (IMSS) to the rules of Modalidad 40, Mexico’s insurance industry will intensify promotion of personal retirement plans, known as planes personales de retiro (PPR). These long-term savings and investment products are designed to complement public pensions or savings accumulated in an Afore.
Sergio Liceaga, national president of the Asociación Mexicana de Agentes de Seguros y Fianzas (AMASFAC), said Modalidad 40 affects people at ages 45, 55 or 60 at certain points. He said the industry is focusing on young people, explaining that a PPR is one of the main ways to build a pension or retirement savings through insurance.
At a press conference promoting Semana del Seguro, which runs from October 30 to November 10, Norma Alicia Rosas, general director of the Asociación Mexicana de Instituciones de Seguros (AMIS), said PPRs carry tax incentives that encourage saving and allow people to supplement their income during retirement.
Rosas said the insurance sector has worked in recent years to promote these instruments. She noted that Mexico’s demographic transformation, in which people are living longer, makes protection needs evolve over a lifetime.
Rosas said that by 2050, roughly 20 percent of women and 18 percent of men are expected to be over 65 years old. “Within 25 years, one in five adults will be over 65,” she said, adding that young people and others have time to prepare and save for a dignified life in old age.
Rosas acknowledged that work remains to expand access to insurance and increase its penetration in Mexico. She said insurance sector penetration equaled 2.9 percent of gross domestic product (GDP) last year, but that challenges remain.
She highlighted gender gaps in coverage: while 28.2 percent of the male population has at least one insurance policy, only 18.3 percent of women have some coverage.
