Costa Rica: Outlook for the Insurance Market

Fitch projects a growth close to 15% in premiums this year, in a context of economic stability and consolidation of strategies by insurers.

Monday, April 10, 2017

From a report by Fitch Ratings:

Strong growth in premiums: the Costa Rican insurance industry grew by 16% in terms of premiums written up to the close of 2016, the result of a reclassification in the financial figures of the state - owned company and the largest market participant, Instituto Nacional de Seguros (INS), which was influential in the growth of -9% in 2015. Excluding this reclassification, the sector's growth reached 9% at the end of 2016, which is still a favorable level, according to Fitch Ratings. Meanwhile, private equity insurers recorded premium growth of 35%, thanks to innovation in products and marketing channels.   

Improvements in operating performance: At the end of 2016, the Costa Rican insurance industry had a combined ratio of 105.4%, a favorable figure in relation to the 111.5% of 2015. This resulted from a significant improvement in the accident rate in the sector, product of a focus on profitability in underwriting policies in the main business lines, especially by the state-owned company, which also improved its performance. Operational efficiency of the market remained stable, helped by sustained growth in premiums, which allowed companies to properly dilute higher costs.  Fitch Ratings believes that the combined ratio will approach 100% in the medium - term due to a strategic focus on profitability on the part of insurers.  

Read full report (in spanish).

Do you need information about the financial sector?

Request more information:

this site is protected by reCAPTCHA and Google's privacy policy and terms of service.
Need assistance? Contact us
(506) 4001-6423

More on this topic

Insurance in Central America: Outlook for 2018

March 2018

Projections are that this year growth of the Central American insurance sector will be driven by activities in the markets of Costa Rica and Guatemala.

From the report "Prospects 2018: Insurance Sector in Central America" by Fitch Ratings:

Costa Rica: The Insurance Industry in June 2015

October 2015

An accounting change in state insurance company explains the reduction of 3% in total industry premiums at the end of the first half of 2015 compared to the same period in 2014.

From a report by Fitch Ratings:

Sustained Growth: Since the opening of the Costa Rican insurance market to private competition in 2008, the market has experienced high and constant growth in premiums .

Insurance Industry in Costa Rica

September 2009

Fitch Rating's Special Report: "Insurance Industry Costa Rica: End of the State's Monopoly"

Costa Rica's insurance industry had been dominated by a state-owned monopoly until the new Insurance Law of 2008; up to December 2008 it is the largest and fastest growing market in Central America (excluding Panama).

Annual Nicaraguan Insurance Sector Report

April 2009

There was an improvement in accident rates and operating performance in the Nicaraguan insurance sector in 2008, as reported by Fitch in a special report.

Thanks to the growth in insurance premiums in the period and progress in costs and accident rates, the sector was able to overcome the operating loss that occurred last year (especially the state insurance company), registering a combined index of 96.3% in 2008 compared to 103.7% in 2007. The good operating performance has enabled the sector to more than offset the decrease in net financial income contribution (by private insurance companies in particular) and impact on the greater overall profitability. The expected decrease in the level of economic activity and thus in the sales of insurances implies a major challenge for the sector and for protection of the progress achieved in the short term. At the close of the previous year, net insurance premiums totaled C$2.1 million, 14.0% above the amount registered in 2007. The faster growth in the case of private insurance companies (17.1%) is worth noting, taking into account the significant growth in premiums of Metropolitana Life Insurance Company (35.1%) and Lafise Insurance (25.7%). For its part, the INISER (Nicaraguan Insurance Institute) experienced a growth of 8.6%. The positive growth of the sector has been primarily in the business of auto and life insurance.