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Costa Rican insurance

Monday, December 8, 2014


The climate is positive for insurance companies, as it becomes easier to do business in Costa Rica, one of the richest countries in the region – and one of the least insured.

Much of the growth will come from efficient regulation, as Costa Rica adapts to a market economy in the insurance sector, including approval for new policies in less than 30 days, compared to up to several months a few years ago.

Until 2008, Costa Rica had no system for supervising the sector, while the state-owned National Insurance Institute (only in Spanish) – still the dominant player with close to 80% of total sales - had a monopoly on sales.

Currently, 13 companies, twelve of them privately owned, offer a variety of policies to the public, including health, life, home and automobile.

Commercial policies valued at little more than 1% of the value of national production are low for a country with an average per capita income of nearly $11,000 a year.

By comparison, the insurance sector of each of Colombia and Chile is around five times bigger, while in the United States it represents around 15% of the value of national production.

Growth in the sector should benefit not only companies but also brokers, who can explain options in a market, which currently has hundreds of policies, compared to a few dozen during the monopoly period.

Several major companies have entered the Costa Rican market, including Blue Cross and Pan-American Life, both based in the United States, Qualitas of México (only in Spanish), and Mapfre and Assa (only in Spanish), both based in Spain.

Most of the new operations are franchises, operated by local and regional owners.