Best’s Market Segment Report: AM Best Maintains Negative Outlook on Colombia’s Insurance Market

MEXICO CITY--(BUSINESS WIRE)--AM Best is maintaining its negative market segment outlook on Colombia’s insurance industry, mainly owing to challenging global conditions pressuring the country’s economy.

The new Best’s Market Segment Report, titled, “Market Segment Outlook: Colombia Insurance,” notes that although economic conditions in the country have improved in the last few years, development has been limited by the spread of COVID-19 and pandemic-related measures. Additionally, Colombia relies on the hydrocarbon and mining sectors, which makes it vulnerable to shifts in global commodity prices and demand.

As of December 2021, Colombia’s insurance market registered COP 35.3 billion in premiums, consolidating its position as the fourth-largest player in Latin America’s insurance market, with 15.8% year-over-year growth. At the end of July 2022, the insurance market showed 20.4% year over year growth, albeit with a negative technical result; however, property/casualty business has shown slight improvement. The claims rate is still being affected by the residual impacts of the COVID-19 pandemic and inflation. The life segment accounts for 54% of total gross premiums written, and the non-life segment, 46%.

“Due to inflationary pressures, interest rates have reached a level was not seen since the 2008 crisis,” said Olga Rubo, senior financial analyst, AM Best. “Higher interest rates favorably affect investment income, to which carriers with a heavy life component are particularly sensitive.”

AM Best expects Colombia’s insurance market to withstand the current challenges. However, the pandemic and the resulting damage to the economy will continue to strain the segment considerably. AM Best will continue to monitor the economic, political, and regulatory landscape, and the impact on Colombia’s insurance industry.

To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=324929.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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