Consorcio leads consumer lending league

Chilean insurance group Consorcio was leading the consumer lending league among local insurers as at October 31, both in terms of loan volume and number of loans, securities and insurance regulator SVS said in a statement. Insurers began granting consumer loans in May last year after receiving authorization from the SVS, which hoped their entry would boost competition in an otherwise bank-dominated market. Consorcio granted a total of 5,555 consumer loans worth 2.2bn pesos (US$3.63mn) between May 2002 and October 31 this year. Rival insurers La Construccion and Bice Vida followed with 5,472 and 1,969 loans, worth 1.75bn pesos and 889mn pesos, respectively. ISE-Las Americas and Penta Vida are the two other insurers active in the consumer loan market and they granted 153 and five loans respectively during the same period. As of October 31, the five insurers had granted a total of 13,154 consumer loans worth 4.92bn pesos since May last year. The five insurers are likely to increase their lending next year and other rivals will probably enter the consumer loan business because it has been a highly profitable product, Fitch Ratings Chile's insurance analyst Rodrigo Salas told BNamericas. The growth rate of the insurers' consumer lending next year will depend largely on regulatory changes and the performance of the economy, Salas said, adding that the economic outlook for 2004 is positive. The local insurance industry has lobbied the government for some time to authorize sector players to use more of their funds for consumer lending. Although the SVS has said it would be willing to increase the cap on funds insurers can devote to lending, no date for such a reform has yet been announced.