MEXICO CITY--(BUSINESS WIRE)--AM Best has maintained a stable market segment outlook on Panama’s insurance industry, citing sound capitalization among the country’s carriers, their profitable underwriting strategies and improving risk management practices.
Panama remains a consistent growth driver for Central America’s overall insurance market, and in 2018, the country’s insurance market expanded by 3.9%, slightly outpacing gross domestic product growth. A new Best’s Market Segment Report, titled, “Market Segment Outlook: Panama Insurance,” notes that country’s insurance industry is concentrated among five companies, which account for more than 73% of the market’s gross premiums written.
Panama’s insurers continue to adjust policy prices and implement stricter expense containment strategies to enhance underwriting performance, and as a result, the market’s overall loss ratio dropped to 49.7% in 2018 from 51.2% in 2017. The combined ratio for the market was 84.1% in 2018, a slight improvement from the 85.2% recorded in the previous year. Other positive signs include consistent revenues from the Panama Canal, increased production output in copper mining, continued functionality as a regional financial services center, and optimism from public infrastructure project bids. However, trade uncertainty between the United States and China has the potential to affect the volume of commercial activities in the Panama Canal.
The industry’s enterprise risk management (ERM) framework has benefited from a regulatory regime that focuses on the prevention of money laundering and corporate governance, to close loopholes and minimize financial risks. AM Best expects that further improvements in the industry’s ERM framework will safeguard the financial strength of Panama’s insurance industry.
To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=292788.
AM Best is a global credit rating agency, news publisher and data provider specializing in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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