During the first quarter of this year, the National Insurance Institute will begin to offer two new policy modalities aimed at the aquaculture and poultry sectors.
The Executive President of the National Insurance Institute (INS), Elian Villegas Valverde, explained last January 9 that the Poultry Insurance will cover hens for breeding, broiler and laying hens for consumption, while the Aquaculture Insurance, will focus on shrimp, fish and snapper spot.
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."
Explained in part by the increase registered in mandatory insurance, last year income from premiums in Costa Rica added up to $1.323 billion, 15% more than in 2016.
Costa Rican authorities reported that last year the largest increase was recorded in mandatory types of insurance, with interannual increases of 26% (¢28.4 billion) in Occupational Hazards and 18% (¢7.5 billion) in the Obligatory Automotive.As a result, this category gained a 1.9 pp share with respect to voluntary insurance categories.
The increase in the mandatory insurance segment is responsible for most of the 20% growth recorded in premiums in the first quarter of the year compared to the same period in 2016.
From a report by the Superintendency of Insurance:
In April 2017, insurance premium income grew by $94.5 million (20.5%) compared to 2016, closing at $558 million.Growth was generalized by category and, in all cases, higher than the main price and production indicators.
The National Insurance Institute has announced it will modify two regulations so that non irrigated rice crops can once again receive coverage which was suspended earlier this year.
Rice farmers who grow grain on unirrigated land may be eligible sometime before March to be covered by the National Insurance Institute (INS) which suspended coverage earlier this year.
Having been affected in the last two years by losses in this category, the state insurance provider has suspended the issuance of policies for rain fed rice harvests, and plans to make changes to the insurance terms.
Authorities at the Ministry of Agriculture plan to ask the National Insurance Institute (INS) to reconsider the measure in the North Huetar and Atlantic Huetar regions, where rice farmers are complaining that they have already planted a significant amount of land. Losses incurred by the state-run insurer with this policy in 2015 exceeded $4 million.
Through eight financial institutions enterprises in the agricultural sector will have access to a collective crop insurance with Instituto Nacional de Seguros.
Some of the crops covered by this insurance are: rice (waterlogged, complementary irrigation and rainfed), squash, banana (organic and traditional), cocoa, coffee, Indian cane, sugarcane, onion, spicy export pepper, sweet pepper, beans, bulb flowers, leather leaf fern and hydroponic vegetables, corn, melon, watermelon for export, yam and taro for export, oil palm, potato, papaya, pepper, pineapple and plantain for export, Jaltepec burley tobacco, teak and melina , tiquizque, cassava, yampi, ñampí for export, and carrot.The list could be expanded on pending a study by the INS.
The Salvadoran and Venezuelan joint venture, already a participant in the food, financial and energy sectors, will be supplying agricultural insurance for grain producers.
With insurance policies for farmers, the conglomerate Alba Alimentos "... promises to pay farmers who provide basic grains to Alba an the amount of $420 per acre if their plantations suffer drought, flooding or other damage."
Producers are complaining about a lack of adequate policies for the industry, but since it is an insurance category that requires a large volume of production in order to be profitable, insurers do not see the business as very attractive.
In the view of entrepreneurs in the agricultural sector, the State, through the Agricultural Insurance Institute (ISA), should take on the role of insurer for the sector's activities, replacing private companies, which do not see any attraction in the business of issuing such specialized policies as those required in agriculture.
A project is being promoted for price risk management in order to reduce losses caused by constant changes in the international price of grain.
The Association of Producers and Exporters in Nicaragua (APEN) together with the Agricultural Exchange, SA (Bagsa) is promoting a digital platform on which producers can consult the international prices of their products and the development of a hedging instrument, ie insurance against falling prices.
A state-run insurance company project aims to create an insurance group for crops in order to encourage the use of these policies, the costs of which are high due to the high risk they present.
The Ministry of Agriculture and Livestock (MAG) and the National Insurance Institute (INS) are backing the concept of group insurance for agricultural producers so that they can have increased access to crop insurance.
Little knowledge on the subject and difficulties in properly measuring the risks are some of the causes of the limited supply of this type of coverage.
Currently only one company, out of the 5 operating in the country, provides insurance for the agricultural sector. At the end of 2014, written premiums for this sector where only 0.05% of the total, ie $ 2.4 million.
Between January and September crop insurance generated premiums of $1.9 million, well below the performance of other policies, such as life, which increased by 10% compared to the same period in 2013.
According to the Guatemalan Association of Insurance Institutions (Agis), "... lack of awareness among the population to ensure their crops is one of the reasons why agricultural insurance has shown only modest growth."
During the first half of 2012, the insurance sector in Latin America had a premium volume of $77,085 million, maintaining growth rates of two digits.
According to César Quevedo, deputy director of the Institute of Science at Seguro de Fundación Mapfre, the insurance industry is "key" to this global market.
On presenting the report, "The Latin American insurance market," the official noted that this "is a key region for the present and future in global insurance."
Agricultural insurance coverage in the Americas maintained positive growth in those countries that have launched a public-private model and where agriculture represents a fundamental part of the economy.
From the study "Agricultural insurance in the Americas: a tool for risk management", prepared by the Inter-American Institute for Cooperation on Agriculture (IICA) and the Latin American Association for the Development of Agricultural Insurance (ALASA):