ASSA Compañía Tenedora, S.A. and ASSA Compañía de Seguros (ASSA) and American International Group, Inc. (NYSE:AIG) today announced that they have entered into a share purchase agreement under which, ASSA will acquire 100 percent of AIG’s operations in Central America located in El Salvador, Guatemala, Honduras and Panama.
The transaction is subject to regulatory approvals in each country.
The reduction of 30% in premium income from compulsory work risk insurance accounted for most of the 8% decline in revenues from total premiums up to March.
In March general insurance and personal insurance maintained the upward trend that had been seen the previous months, with growth rates compared to the same month in 2014 of 6.1% and 8.3%, respectively.
Insurers have started to issue these policies which compete with bank share and performance guarantees.
The National Insurance Institute (INS) and Oceánica Seguros are the two companies which have been offering such policies since this year. Meanwhile, the company ASSA will start to offer them in in 2015 and Mapre is still adjusting its offers with a view to supplying them in the future.
The state run Nacional de Seguros and PanAmerican Life share 88% of the market in the segment of accident and health policies.
The segment for Accident and Health policies showed that up to March 2014 the majority market share was held by Instituto Nacional de Seguros (INS) with 46.4% and 41.7% was held by Pan American Life, according to the Superintendent of Insurance (SUGESE).
In the last interannual period personal insurance increased by 11%, general by 5% and compulsory by 9%.
From a bulletin on the Insurance Sector in November 2013 by the Superintendency of Insurance:
BASIC INDICATORS
The total amount of direct premiums collected reached c436,3 billion in November 2013. The involvement of voluntary insurance equaled the average of the last four annual periods - Nov 20l0-Nov 20l3), 73%.
After five years of monopolization, there are 13 insurers, 17 brokers companies, 63 agency companies and 49 auto insurance operators competing in the Costa Rican insurance market.
Nacion.com reports: "Also noteworthy is the 442 products registered up to June this year, surpassing the 159 registered in the same month in 2010."
At the end of the first half of 2013, the Instituto Nacional de Seguros led the market with 89.7%, followed by Assa with 3.2% , Pan American Life with 2.9%, Mapfre with 1.6% and Adisa with 1.4%.
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.
In Costa Rica, 4 years after the opening up of the sector, the 10 private insurance companies have a 9.8% market share.
The undisputed leader remains the Instituto Nacional de Seguros (INS), with a 90.2% market share and among the private companies the strongest are Mapfre and Assa with a 9.6% share between them.
According to the Superintendent of Insurance, the largest segment of the market is the general insurance category (51%), followed by sickness insurance (26%) and personal life policies (26%).
In Costa Rica compulsory motor insurance remains the monopoly of the state run insurance company, the INS.
A constitutional action filed against the opening up of the market for the Workplace Insurance, arguing that "this social insurance is designed to provide universal coverage at no cost to all people working in the country, against any accident or illness resulting from their activity ", has also detained the liberalization of the market for compulsory insurance for motor vehicles.
Despite the entry of new insurers, in Costa Rica there are few options for insuring small appliances.
At the moment, only the National Insurance Institute of Costa Rica offers policies to insure this type of device, which has an annual cost of ¢15.000 colones ($30) and covers up to ¢500,000 ($1,000).
According to a survey by the newspaper La Nacion, "other companies such as Assa and Mapfre also give coverage, however, these are restricted because they are directed at electronic equipment of a larger size or because they are designed to insure various pieces of equipment and not just one."
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."
Two new companies sold 17% of this sector of the Costa Rican market.
Panamerican Life and Seguros de Alico are the main rivals of the National Insurance Institute (INS), with a share of 14% of the personal insurance policies sold in the Costa Rican market, while other private companies control 4%.
The INS still retains 83% of the market, reported Nacion.com.
In Costa Rica private insurers have come into the market, primarily selling life and car insurance, with customers seeing lower rates.
Although the National Institute of Insurance (INS) remains the undisputed market leader, private insurers are gradually gaining ground, particularly in the areas of auto and life policies.
The INS, an agency which has been in existence for 84 years, still controls 97% of the auto insurance market and 94% of life policies. In the former, in which $200 million worth of business was done in 2011, only Mapfre Seguros has taken a toll on the quasi-monopoly of the INS, taking 3% of the market, according to data released by Nacion.com.
In the newly privatised insurance market, companies are competing with the National Insurance Institute (INS in Spanish) to increase their portfolios.
Last June, according to the premium income figures, registered insurance lines and assets, INS was first, followed by Assa and Alico with its life and health insurance lines.
"Where Assa stands out is in general insurance, where in the first half of this year it accumulated almost $6.7 million in premiums paid, this amount was generated by 42 different products, especially those covering property damage", wrote Sergio Morales on Elfinancierocr.com.
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