Fitch Ratings forecasts that the insurance sector in Central America will close 2018 with a year-on-year increase of almost 6% and expects that in 2019 the business will reach a very similar growth rate.
The projected increase for 2018 and 2019 would be based on the behavior of the Panama, Costa Rica and Guatemala markets, however, the increases of 5.8% and 6.1% forecast for 2018 and 2019, respectively, would represent a slowdown regarding the 8.2% growth registered in 2017.
In Honduras, the insurance policy for 137 vehicles, the satellite monitoring service for 129 units and preventive and corrective maintenance for another 137 are being tendered.
The Judicial Power in Honduras is putting out to tender collective life insurance and medical hospital policies for the institution's officials and employees at the national level.
Explained by the behavior of the Costa Rican market, in 2017 Central American insurers received $5.02 billion in premiums, 7% more than in 2016.
According to a report drawn up by Revista Desempeño Asegurador, in 2017 "... insurance sales in the region expressed an absolute increase of US $334.7 million, an amount that represented a rise of 7.1% compared to sales in 2016."
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:
Stable Rating Perspective:The rating outlook for the Central Americaninsurancesectoris stable for 2018, given that most of the rated companies maintain a stable outlook on an individual basis.Fitch Ratings believes that the sector shows stable fundamentals, as a result of good profitability levels and high liquidity and capitalization indicators in all countries, which it expects to continue to be reflected in solid balance sheets in companies.
In Honduras, contracts are being sought for one year insurance policies to cover the vehicle fleets of the Ministry of Finance and the National Autonomous University.
The National Vocational Training Institute in Honduras is putting out to tender collective insurance of medical and living expenses for its personnel, and insurance for buildings, equipment and the vehicle fleet.
The Honduran National Port Company (Empresa Portuaria Nacional de Honduras) is putting out to tender protection insurance for its personnel and the assets belonging to the institution.
Three companies accounted for 62% of total premium production and about 50% of the system's assets.
From a report by Fitch Ratings Central America:
Industry Concentrated by Market Players: The Honduran insurance sector is made up of 12 competitors. In 2016, the three main companies accounted for 62% of total premium production and about 50% of the system's assets.Two of these belong to financial groups and benefit from the related banking channel and businesses referred by them to achieve greater penetration within the market.The entry of two new competitors, subsidiaries of regional groups, could favor the creation of a new market and the development of more products.Fitch Ratings does not expect changes in the concentration of the main players in the market.
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