It is estimated that the lack of competition among wholesale suppliers and the over-regulation of fuel prices generate an estimated annual cost of about $830 million to the Costa Rican society.
According to a study carried out as part of Costa Rica's accession to the Organization for Economic Cooperation and Development (OECD), over-regulation hinders competition between service stations and does not allow consumers to take advantage of lower prices.
Ten years after the elimination of the insurance monopoly in Costa Rica, private insurers have managed to "steal" from the state company about 12% of the market.
Mapfre Seguros, Sagicor, Assa Compañía de Seguros and Best Meridian Insurance are some of the 12 private companies that have been competing in the Costa Rican insurance market since 2008, when the law came into force opening up the business which for more than 80 years was in the hands of a single company, Instituto Nacional de Seguros.
The OECD Consumer Policy Committee has approved policies on insurance and private pensions, and recommended improving risk-based supervision and promoting the participation of more insurers.
From a statement issued by the Ministry of Foreign Trade:
Income from voluntary insurance premiums grew by 18% in relation to June 2015, reaching $490 million.
From a monthly report by the Superintendent of Insurance:
The evolution of compulsory insurance in respect to previous months is: 32% growth that corresponds to an increase of ¢38.6 billion colones in SOA, concentrated in January of this period as a result of a change in the accounting methodology, specifically, for the SOA period, premiums that were previously registered in December of each year were recorded in January 2016 of this year.RT premiums decreased by ¢15.6 billion colones.
Rules have been published in Costa Rica which must be followed by any private insurance company willing to sell mandatory vehicle insurance, which until now could only be issued by the state run insurance company.
MOPT regulation number 39.303 published in the Official Newspaper, La Gaceta, establishes maximum profit margins, the conditions to be met by insurance companies who sell Compulsory Vehicle Insurance (SOA by its initials in Spanish) and other considerations.
The Superintendency of Insurance in Costa Rica is planning to start the process of opening up the market for compulsory automobile insurance in the first quarter.
In order to liberalize the market for compulsory automobile insurance, there first needs to be a review and approval of a decree which will focus on the regulation of the sale of insurance from the National Insurance Institute (INS) to private companies.
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":
In Costa Rica insurance companies are seeking to increase sales of policies to SMEs and take advantage of a hitherto untapped market.
Small and medium enterprises (SMEs) represent 77% of businesses in the country, and therefore insurers are seeking to enter this market niche which has not been fully exploited.
The Superintendent of Insurance is preparing a bill to promote market development by encouraging the installation of foreign reinsurance companies in the country.
The bill, still in draft form, aims to attract major reinsurance companies to the country and use the market already operating in the country as a platform.
The Costa Rican State insurance company will have to pay $174,000 as a penalty for "improving any offer made by their competition to their customers."
The Antitrust Commission imposed a fine of 94 million colones ($174,000) on Instituto Nacional de Seguros (INS) in a case reported by the Superintendent of Insurance in 2011, a year after the opening up of the market.
US insurer BlueCross BlueShield, has announced the opening of its operations in the country, which will be part of the Puerto Rican Triple-S Group.
From a statement issued by BlueCross BlueShield Costa Rica:
Insurer arrives in the country with plans for complementary health
• Member of the BlueCross BlueShield Association (BCBSA), an organization of more than 37 healthcare companies in the United States and other countries and which serves, through them, over 100 million policyholders.
The sale of life, accident and health insurance rose from $113 million in June 2013 to $148 million in the same month in 2014.
Figures from the Superintendence of Insurance (SUG) show the growing interest on the part of Costa Ricans in policies for medical expenses and life coverage. While the premiums for personal expenses policies, including the two mentioned above, grew by 21% last year, the increase in overall policies in the same period was 12%. In total they invested $566 million.
Low-cost auto insurance policies are rapidly expanding the insurance culture in sectors of the population who can not access traditional policies.
Since the opening up of the national insurance market in 2008 and the incursion of microinsurance in 2010, 64 different types of products have been created.
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). The remaining 11.9% is made up of the Insurers Aseguradora del Istmo, with 7.4%, and other market participants (Mapfre, BMI, Atlantic Sauther, SM) with 4.5%.
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