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

MEXICO CITY--(BUSINESS WIRE)--AM Best is maintaining its negative outlook on Colombia’s insurance industry, citing challenging economic conditions, including rising inflation and interest rates, and political uncertainty.

According to the new Best’s Market Segment Report, “Market Segment Outlook: Colombia Insurance,” moderate and steady economic expansion is expected in 2026 and 2027. At the same time, the country’s insurance market grew by nearly 9% year over year in 2025. However, inflation is expected to spike up due to pressures from a recent hike in the minimum wage, and other factors such as rising gas prices and climate shocks. While the shift in rates should increase the investment income of insurance companies, there will be an immediate decrease in the market value of the current fixed-income portfolios, especially those with higher durations.

Colombia’s insurance market remains moderately concentrated, with the top five players accounting for 44% of premiums, with market dynamics increasingly shaped by climate-related risks. Economic factors have suppressed demand for voluntary coverage, especially among small and medium-sized enterprises and lower-income households. Supply is further constrained by limited reinsurance diversification and regulatory lag in approving new products. Overall, the market meets basic needs but struggles to address escalating climate and catastrophe risks efficiently.

The report notes that the upcoming 2026 presidential election also could affect insurance market growth. A widening fiscal deficit combined with negative shifts in fiscal policy, such as an increase in the value added tax (VAT), could reduce expected growth in 2026. The country is expected to undergo tax restructuring, which will be important to monitor after the new administration takes office.

“While steady economic growth, increasing private and public consumption, and technological advancements support expansion, rising inflation and interest rates, and increased volatility from the 2026 elections in Colombia could put downward pressure on the performance of insurance companies,” said Olga Rubo, associate director, AM Best.

To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=365308.

To view current Best’s Market Segment Outlooks, please visit http://www.ambest.com/ratings/RatingOutlook.asp.

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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