BMI View: The insurance industry of the Dominican Republic is small in absolute terms and among the least developed in the Latin America and Caribbean region in terms of penetration and density. This lack of development is largely due to the low income levels of Dominican households and hence a lack of awareness of the benefits of discretionary insurance lines among all but the wealthiest households. As such, basic lines such as property and motor vehicle insurance will remain the main drivers of growth. However, we note a strong surge in demand for health and personal accident insurance products as disposable incomes, driven by a strong economy, start to climb. Life insurance premiums are also set to grow over the next few years, albeit at a more marginal pace, and these factors will present opportunities for insurers in a fast-growing and relatively immature market.
Key Updates And Forecasts
The Dominican Republic boasts one of the best-performing economies in the Latin America and Caribbean region. BMI's Country Risk team forecast the economy to grow by 5.2% in 2017 and to experience average annual growth of 4.7% through the 2017-2021 forecast period. This robust pace of expansion will support growing demand for personal and corporate insurance lines across both the life and non-life markets, though we caution that political instability, resulting from the Odebracht corruption scandal, has the potential to derail the country's current economic growth trajectory.