Snapshot: Costa Rica's insurance sector, March 2019

Costa Rica’s insurance premiums reached 303bn colones (US$517mn) in March, an increase of 26bn colones from March 2018, backed by strong growth in personal lines, according to insurance sector regulator (Sugese).

Sugese said the 9.4% year-on-year increase far surpassed both inflation and the monthly economic indicator (IMAE) for March, of 1.4% and 1.5%, respectively.

Mandatory auto insurance premiums, dubbed SOA, rose 7.7% to 111bn colones, although its share of total premiums fell one percentage point.

Last month Sugese proposed a reform that would require increases in coverage provided by SOA to relieve the social security system (CCSS), which currently assumes 19% of the costs associated with traffic accidents. The proposal would raise SOA coverage from 6mn colones to 13mn, potentially pushing premiums higher.

Premiums for general insurance lines increased to 103bn colones in March from 99bn colones a year before. However, they lost a 1.8pp share of the total.

The regulator reported that voluntary auto, life, health and fire continue to be the primary lines in the country, comprising 85.2% of all non-obligatory premiums. The share is up 2.6pp over March 2018.

The four segments are also the fastest growing. Life premiums rose 7.6bn colones (up 20.1%), health 4.4bn (up 14.6%), vehicles 4.2bn (up 7.7%), while fire and related lines grew by 3.9bn colones or 18.3%.

Sugese said the largest players in Q1 were former state insurer INS with a 78.7% market share, Pan American with 7.2% and ASSA with 6.3%.

ASSA gained the most share in the quarterly comparison at 2.1pp, followed by Pan American at 0.6pp and INS at 0.5pp, while the remaining insurers either lost market share or saw little change.

The watchdog also said surety premiums increased to 2.1bn colones this March from 795mn colones a year ago, a 260% increase, though it added “this particular branch is very erratic and its variations do not show a definite trend.”