The public health system undoubtedly improved over the decade of the Correa administration through 2017 into Moreno’s tenure as the government focused on social issues. Access to Ecuadorian Social Security Institute (IESS) treatment is not means-tested and contributors who might previously have been expected to purchase private cover became more prepared to rely on the public system.

Government departments, once an important source of business for the private market, were understood to be using the state system as a matter of policy. More recently, however, there were signs of strain in the public system, with private medical insurance (PMI) becoming more desirable for those looking for speedier attention to their problems, as well as the existing sector which wants the opportunity to access facilities outside Ecuador.

As the non-life market contracted by almost 18% from 2014 through 2019, PMI could not quite match the 44.9% growth in life premiums but posted a healthy 26.7%, passing USD 100mn for the first time in 2019 when the class represented 4.6% of total market premiums. According to Axco Global Statistics, in that year Ecuador ranked 66 worldwide for PA and healthcare premiums, amongst Latin American countries between Costa Rica at 65 and Venezuela at 71.

The COVID-19 pandemic is expected to have a significant effect on most insurance markets around the world, not limited to a major decline in the financial markets and an expected upsurge in claims related to deaths and health. In Ecuador, Presidential Decree No 1017 of 16 March 2020 declared a state of national emergency for 60 days from that date. Although this period was subsequently extended, the state of emergency with the restrictive measures it imposed on freedom of movement and association ended for constitutional reasons on 12 September 2020. At that point, there had been over 11,000 deaths from more than 126,000 cases registered.

As part of the emergency measures, Ministerial Agreement 00126-2020 of 11 March 2020 prohibited private insurers and prepaid medicine companies from limiting in any way their PMI coverage for COVID-19. Many policies did have an exclusion for pandemics which was therefore not applied.

Ecuador has taken steps to ensure insurance companies protect the public from COVID-19. The impact will undoubtedly be felt in the life insurance market, but how? Find out with Axco.