Customers who are guided by immediacy and technology, who are also more focused on travel than buying health or life insurance, force insurers to reinvent their processes to continue increasing their sales.
Because the population group known as the "millennials," which is made up of customers who like to keep up with the buying process and are not willing to wait, companies must transform to keep up with their sales pace.
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."
Growth in sales of vehicles and homes in the country has generated an opportunity for the insurance business, in a market where penetration is only 3%.
Greater purchasing power and the consequent increase in purchases of homes, cars and other goods is generating interesting opportunities for other complementary businesses.
Panama stands out as the country with the highest penetration rate in the region, and at the other end is Honduras, with the lowest rate, and below the average in Latin America.
From a report by MAPFRE: "Trends of growth in insurance markets in Latin America":
Guatemala
The insurance market penetration rate in Guatemala stood at 1.23% in 2015, showing a stable trend over the analyzed period,graduallymoving awayfrom the average for the region. The deepening index, meanwhile, stood at 19.7%, with a tendency toward gradual improvement, but still below the average for the Latin American markets.
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
Since the Costa Rican insurance industry opened up to private competition in 2008, the market has experienced rapid and consistent growth in premiums.
Auto policies are the fastest growing category, with an increase of 14% so far this year compared to 2013.
Lack of a culture of prevention is preventing the emerging Nicaraguan insurance market from achieving high growth rates in most policies. Car policies are the most sought after, but those for life, property and health are growing slowly.
"... In 2013, the insurance industry paid $40 million in personal insurance, which included life insurance, accident and health insurance and pension income; also in property insurance including car insurance, fire and other policies, $105.2 million was paid."
Between December 2012 and December 2013 revenue from premiums went from $138 million to $156 million.
The pace of growth in the insurance sector in Nicaragua increased during the first quarter of 2014, registering premiums of $43 million, an increase of 21% compared to the same period in 2013.
Laprensa.com.ni reports that "... of the total premiums sold during 2013, the property insurance segment accounted for 71% of total sales, receiving $111.15 million, reflecting a growth of 10 5% compared to the $100.56 million sold in 2012. "
Products in the category of life, accident and health lead the 6% increase in premiums seen in the first three months of the year compared with the same period in 2013.
Total premiums paid in the first quarter amounted to $42 million, of which 37.4% were for first party car insurance, 21.0 % for fire insurance and associated lines, 19.09 % for life insurance (individual and collective) and the remaining 6.01 % for health insurance.
From 10 to November 13 representatives from insurance companies will gather together in Guatemala to address topics of interest to the industry.
Among the topics to be discussed at the event being held in Antigua, Guatemala, are the new trends and recent innovations in the insurance industry. The event, held bi-annually since 1946, facilitates relationships between insurers and reinsurers.
The Instituto Nacional de Seguros will provide $43 million in insurance for a hydroelectric project in Nicaragua, through reinsurance services.
The Hidropantasma Hydroelectric Project in Jinotega is based on Costa Rican, Panamanian and Honduran capital, and the policy with which the INS will cover it is "All Risks Fire - Dollars".
Costa Rican laws prevent the INS operating across borders.
Backed by the Central American and Caribbean Network of Microfinancers six companies have begun offering microinsurance to families and small businesses.
Ivan Gutierrez, executive director of the Central American and Caribbean Microfinancers Network (Redcamif), said that "from July this year six microfinance institutions will start to offer life and accident insurance, health insurance and temporary disability income."
Private insurers are beginning to outperform the state insurance company and have so far captured a 40% market share.
The ranking of the premiums made by the Superintendency of Banks and Other Financial Institutions (Siboif) reveals that in the case of Seguros América S.A.,in the first quarter of 2013, they led the market with 29.3% of the sector. The company following them is Instituto Nicaragüense de Seguros y Reaseguros (Iniser) with 26.4%, ASSA Compañía de Seguros SA with 18.9%, Seguros Lafise with 17,5% and Mapfre Nicaragua with 7,8%.
A bill expected to be passed next week would open the door for foreign insurers.
Congressman Wálmaro Gutierrez, from the committee that wrote the bill, explained that the insurance industry is currently regulated by a decree from 1970, which was reformed on several occasions. The last modification closed the insurance market to foreign participants.
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.