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AMLO austerity plan may hurt MetLife México's finances, Condusef head says

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AMLO austerity plan may hurt MetLife México's finances, Condusef head says

Austerity plans announced by Mexico's incoming government, which include cutting insurance premiums for civil servants, could have a dramatic impact on the finances of insurer MetLife México SA, El Economista reported, citing Mario di Costanzo, president of the Condusef financial consumers' defense commission.

Di Costanzo said the planned savings would reduce the company's technical reserves by about 75 billion Mexican pesos, between 70% and 75% of the total of around 104 billion pesos.

He urged MetLife to announce how it would manage its solvency situation for the near future to protect its customers, even though it was covered during the next three quarters.

The comment comes as President-elect Andrés Manuel López Obrador announced multiple plans to save costs at the management and administrative level of the state.

According to previous reports, MetLife México covers around a million state workers, with a contract that matures in May 2019, and is also receiving payments from nearly 30,000 state workers who have extended their health coverage through the existing policy.

As of Oct. 16, US$1 was equivalent to 18.75 Mexican pesos.