Five years after the opening up of the market, there have been 500 new products and some prices have dropped by up to 40%, but penetration is still low.
In an interview with María Morales from Markets & Trends undertaken with the Superintendent of Insurance in Costa Rica, Tomas Soley, the official explained that the opening of the market has led competitors to offer more value added products.
The insurance firm Assa has gained ground focusing on selling insurance to companies, and among the new participants in the market, it has obtained the best results.
Figures from the Superintendent of Insurance (SUG), reveal that for December 2012, Assa Insurance Company had the highest revenue from premiums of all the private firms and was one of the best earners.
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."
Distance marketing of financial products is a business alternative with great potential in Costa Rica.
Elfinancierocr.com reports that "distance marketing of financial products and insurance in particular, is an alternative for both for business insurers as well as intermediaries. However, when insurance mediation activity is regulated by the risk involved, it deserves special attention by the Superintendent of Insurance. "
Sagicor has been authorized by the Superintendent of Insurance to sell personal and general policies.
According to an article in Elfinancierocr.com, Sagicor "... is originally from Barbados and was founded 172 years ago. Sagicor belongs to Sagicor Financial Corporation, an entity which was founded in 2002 and is listed on the stock exchanges of Jamaica , Barbados, Trinidad & Tobago and London. "
A report by SUGESE contains information on Basic Indicators, Market Structure and Participants and Products.
December 2012 Bulletin from the Superintendent of Insurance (SUGESE):
Basic Indicators
The total amount of direct premiums was ¢466.2 billion in 2012, with 69% of that amount corresponding to voluntary insurance. The retention of these total direct premiums compared to 2011 remained at 81% and the total retained earned premiums (allocated ) increased from 96% in 2011 to 91% in 2012.
The Central Bank of Costa Rica is putting to public consultation the Regulation for Defence and Consumer Protection Insurance.
The regulation will be under consultation until 27 December.
Nacion.com reports that "According to this regulation, all natural or legal persons who are properly identified can make complaints or appeals with insurance firms provided these requests relate to their interests or legally recognized rights."
The CEO of the National Insurance Institute of Costa Rica, accepted in a parliamentary hearing that he put political conditions on officers to be reinstated.
A statement by the Legislative Assembly of Costa Rica reads:
HEAD OF INS ACCEPTS HAVING PRESSURED INSURANCE AGENTS
Guillermo Constenla Umaña, CEO of the National Insurance Institute (INS in Spanish), agreed today in front of ministers to look into the finances of the Social Security Department (CCSS in Spanish) that "placed conditions" on agents that they withdraw support for the bill , forcing the INS to rehire them.
Costa Rican insurers received 2120 claims after the earthquake on September 5, relating to damage to homes.
The National Insurance Institute (INS), Mapfre Seguros de Costa Rica and Assa Insurance Company are the three insurers in the country authorized to market this type of policy.
Most of the claims are being processed by the INS, with 1,012 homes and 1,040 for business premises, Mapfre and Assa have 40 and 25.
Despite the de-monopolization of the market four years ago, state institutions continue to obtain their insurance with the National Insurance Institute (INS).
An article in Nacion.com reports that "Although the Law Regulating the Insurance Market (LRMS) leaves open the possibility for public sector entities to buy private insurance policies, few enterprises have contracted their services."
Four years after the de-monopolization of the market, the National Institute of Insurance holds 91.5% of insurance premiums and 12 private insurance companies have won the remaining 8.5%.
An analysis of the topic made by Juan Pablo Arias in his article in Nacion.com, shows that the main benefit of the new competitive environment is growth of the sector in terms of policies issued, which increased by 24% from the date of de-monopolization, with growth attributed to the lowered rates.
Oceánica de Seguros, founded on Venezuelan capital, is the tenth insurance company to be incorporated into the Costa Rican market after its de-monopolization in 2008.
The superintendent of insurance, Javier Cascante, said the company, which is the eleventh to join the insurance market after its opening, will have a joint operating license, for personal and general policies.
A report by Fitch notes the momentum in the insurance sector in Central America and its growth potential.
From the report by Fitch Central America is entitled "Performance of Insurance Industry Central America: Well Positioned for Growth ":
The insurance industry in Central America managed to increase premium production by 12% compared to 2010, where Panama, Guatemala and Honduras recorded an above-average growth.
The number of insurance intermediary companies grew by 75% from 8 to 14 in the last twelve months.
The number of insurance brokers in Costa Rica is now 14, a significant increase, up 75% from March 2011 to March 2012. While the number of intermediaries has increased, the number of insurance companies in decreased to nine during the same period, a reduction of 11.4%.
The total exclusivity requirement imposed by the National Institute of Insurance on agencies who sell their insurance, is an anticompetitive mechanism that is making it difficult for the market to open up.
In his blog " Mercado Seguro " in Elfinancierocr.com, attorney and insurance specialist Said Breedy analyzes the criteria issued by the Commission to Promote Competition (COPROCOM) on the exclusivity clause in agency contracts with the National Institute Insurance (INS) in place since 2007.