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Banorte to Absorb Part of New VAT Hit on Insurance, Signals Some Price Rises

Analysts expect pressured profitability in 2026 due to the tax change raising insurers’ costs.

Overview

  • Mexico’s 2026 fiscal law removed insurers’ ability to credit VAT on third‑party claims starting this year.
  • CEO Marcos Ramírez said Banorte will shoulder a large share of the new cost to stay price‑competitive, though some of it will be reflected in premiums.
  • Banorte will maintain its full insurance lineup, including auto, medical, property damage, SME, and home policies.
  • Specialists foresee premium increases, particularly for auto and medical coverage, with some estimates of up to about 40% for certain medical plans for older adults, while widespread cancellations are not anticipated.
  • Moody’s Local projects moderate sector growth and solid solvency but weaker profitability in 2026; Banorte reported Q4 2025 net income of 15,874 million pesos and 58,788 million for the year, and expects near‑10% growth in several areas.