annual report grupo security - Banco Security

annual report 2007grupo securitypage 63R I S K S R E L A T E D T O T H E I N S U R A N C E B U S I N E S Sl o c a l f i n a n c i a l r i s k sThe fall in long and medium-term interest rates could affect the return on the assets backing annuities and guaranteedrateinvestment accounts when it corresponds to making investments with short-term maturities, generating amedium term operating deficit.m o r t a l i t y a n d s i c k n e s s r a t e sThe increase in sickness rates can generate a rise in claims under serious-illness policies in the medium term andincreases in claims under policies covering reimbursements of medical costs in the short term. The reduction in adultmortality rates can reduce the expected results in the annuities area, to the degree that companies do not adjust to thenew mortality curve structure.i n d u s t r y s t r u c t u r eThe large number of participants in the industry can lead to company closures and mergers, thus changing thepresent industry structure and producing adjustments to the sales and operating margin structures.r e i n s u r a n c e i n d u s t r yThe tendency for reinsurance companies to concentrate could affect the variety of coverage offered, ceasing toprovide reinsurance cover for risks that are currently covered thanks to the strong competition existing in this marketnot long ago.d o m e s t i c c o m p e t i t i o nThe technical margins of branches of high retention in general insurance could continue to fall due to toughcompetition through pricing in the market.