The market total premiums amount rose from $744 million to $794 million and personal insurance (life and health) premiums grew by 37%. By the end of 2011, the penetration (premiums as a percentage of GDP) in Costa Rica was 1.94% and density (per capita spending on insurance) was $172 per person. Both are still significantly lower than the Latin American average, and lower than similar countries such as Panamá (penetration 3.44%, density $301), revealing that the potential growth of Costa Rica's insurance market is still, and will remain appealing to industry investors.
Up to April 2012, 12 insurance companies have been authorised by SUGESE. INS, the state-owned insurer and former administrator of the insurance monopoly, lost 12% of its share of the insurance market (without considering mandatory insurance which remains a monopoly), and 34% of that loss took place during the past year.
In the regulatory field some relevant aspects must be mentioned. The most important is the enactment of the Insurance Contract Regulatory Law, which entered into full force and effect on September 12 2011, replacing Costa Rica's former Insurance Contract Law enacted in 1922. The new regulatory framework adopts modern trends in contract law regulation according to international technical principles. The approval of this law gives consumers and market participants a high level of confidence, which will facilitate the purchase of insurance products.
Also, the creation and continuous activity of the Association of Private Insurers has strengthened the communication between private insurance companies and SUGESE, allowing processes of discussion regarding regulation that affects essential commercial activities, such as bancassurance, policies registration, group insurance and, recently, accountability and solvency.
Finally, an attempt by the government to enact a General Tax Law that intended to create a 14% sales tax on life and health insurance was recently, and fortunately, abandoned.
After three years of a relatively slow de-monopolisation process, commercial and regulatory market conditions have permitted a faster growth of the industry during the last months; private participants have started to gain a significant share of the market and their expectations for the next months and years are positive.