Costa Rica: The Insurance Industry in June 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.

Thursday, October 22, 2015

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 . However, at the end of the first semester of 2015 (1S15), the industry had reduced premiums by 3% compared to 1S14, due to a reclassification of accounts which affected the state company, the National Insurance Institute (INS; market share: 83%). Meanwhile, privately owned companies increased their premiums by 17% due to the innovation of new products and alternative distribution channels.

Operating Performance Remains Weak: At the end of 1S15, the insurance industry of Costa Rica recorded a combined ratio of 116.7%, which represents a reduction compared with 121.1% compared to the same period in 2014. This was an improvement in operating efficiency levels, given the greater ability of private companies to properly dilute the high costs of starting operations. The index is also moderately affected by an increase in the loss ratio, influenced by aggressive pricing in business lines which are characterized by a high frequency of claims. However, Fitch believes that in the medium term, a drop will be seen in the loss ratio due to the strategy of focusing on easy to sell car insurance products.

See "Overview of Insurance in Costa Rica up to 1S15".

More on this topic

Costa Rica: Outlook for the Insurance Market

April 2017

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

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.   

El Salvador: Insurance Sector in the First Half of 2015

October 2015

In June 2015, the Salvadoran insurance industry recorded a growth rate of 4%, higher than the 2.4% increase recorded in the first half of 2014.

From a report by Fitch Ratings Central America:

Continuous growth: In June 2015, the insurance industry of El Salvador recorded a growth rate of 4% compared to the first half of 2014 (1S14), given a growth in the economy of 2.4%, according to central bank data.

Insurance in Central America: 2015 Outlook

January 2015

Fitch Ratings expects moderate growth in premiums in Costa Rica, increased interest in personal insurance in Guatemala, and stable performance in Nicaragua and Honduras.

From the report "Outlook 2015: Central American Insurance Sector":

Costa Rica:

Moderate 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).