Costa Rica's insurance market projects growth and stability

The Costa Rican insurance market has demonstrated consistent growth over the past decade, solidifying its position within the Latin American insurance landscape.

Demonstrating resilience and growth amid global challenges, Costa Rica maintains a stable outlook for the industry, according to AM Best’s most recent rating and report entitled:  "Market Segment Outlook: Costa Rica Insurance".

The Central American nation’s market has experienced notable growth, with premiums totalling CRC 1,073 billion ($2.12 million) in December 2023, marking a 5.5 per cent year-on-year increase, and, as of October 2024, the market had grown 12.2 per cent year-on-year, driven by both compulsory and voluntary insurance lines. 

Other contributing factors are the easing of pandemic-related restrictions coupled with a drive for self-employed workers to purchase compensation insurance from June 2023. 

The Instituto Nacional de Seguros (INS) continues to dominate the Costa Rican insurance market, maintaining a 65% market share in December 2023. 

Despite the market opening to other companies, INS retains its leading position, particularly in compulsory lines such as occupational injury and mandatory auto insurance.

The Superintendencia General de Seguros de Costa Rica (SUGESE) oversees a well-established regulatory framework, focusing on developing mass-market products and aligning capital requirements with Solvency II standards, while government initiatives, such as mandatory vehicle insurance, further enhance consumer protection and market stability.

Despite global economic headwinds, including rising commodity prices and inflationary pressures, Costa Rica's economy has shown resilience and the insurance sector has brought in strong business volume.

The Costa Rican market presents a blend of growth potential and stability, and the report anticipates further advance, underpinned by the stable economic environment and proactive regulatory measures.

The consistent premium increases and robust regulatory environment offer a conducive landscape for reinsurance partnerships. 

However, adherence to evolving regulatory standards amid uncertainty about public finances remains crucial for successful engagement.

Costa Rica's insurance industry stands out for its resilience and growth; the stable outlook, underpinned by economic recovery and a strong regulatory framework, positions the market as an attractive prospect for reinsurers seeking to expand in the Latin American region.

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