Costa Rica Insurance Report Q2 2016

Costa Rica Insurance Report Q2 2016

BMI View: We maintain a positive outlook for the Costa Rican insurance segment as a whole. Both the lifeinsurance and non-life segments are poised for robust growth over the course of our forecast periodof 2016-2020. Insurance sector growth will be driven by rising incomes, a positive economic outlook, anuptick in real private final consumption and rising discretionary spending powers of households that havegrowing disposable incomes. The life sector is poised to grow on par with the non-life sector in 2016,driven by a desire for savings. The non-life sector will grow based on demand for insurance of big-ticketitems such as property, motor insurance and a robust growth prospect for the health insurance life. We arenevertheless cautious about the primary of the former state-owned monopoly, INS, which had premiums ofover 80% of the total insurance industry in the country. We believe that non-life competition to challengeINS primary is stronger than the life insurance competition at present. Smaller challengers, particularlythose with international experience, can capitalize on growth prospects by means of product innovation andprice competitiveness.Latest Updates & Industry Developments

We maintain a strong outlook for the insurance industry as a whole. We forecast a total insuranceindustry growth of 6.5% y-o-y in 2016, with premiums reaching USD1.3bn

Life sector growth will amount to 7.2% y-o-y in 2016, with premiums reaching USD160mn.

Non-life sector growth will approximate 6.4% with premiums reaching USD1.1bn in 2016.