Government Intervention in Rural Insurance and Reinsurance Markets in Mexico, 1940-2000

This paper explains the historical development of agricultural insurance and reinsurance in Mexico in the second half of the 20th century. The central argument is that the Mexican government did not fully acti­vate the rural insurance and reinsurance markets since it continued to intervene in the crop insurance matkets with political purposes. In Mexico, since its origins in 1961, and during most of the period under study, agricultural insurance was provided to farmers mainly by the government through a state-owned insurance company, Anagsa. Although during the 1960s crop insurance in Mexico was based on technical criteria, in following decades its allocation was based on political criteria and a mechanism that fostered corrupt practices. After reform in 1990, agricultural insurance faced a promising horizon. However, always had the challenge of political intervention by the government. This is a preliminary version of a chapter prepared for the book Role of Reinsurance in the World, edity by Leonardo Caruana de las Cagigas and André Straus.