Panama Insurance Industry Rated as ‘Solid’
In another indicator of the strength of the Panama economy, a top global rating company has placed a “stable” tag on Panama’s insurance company, noting the “solid” operations of the local companies.
Rating agency AM Best concluded the insurance agencies “operating fundamentals will support growth,” while labeling Panama “one of Latin America’s most dynamic” economies. Panama’s insurance market has “demonstrated sound capitalization levels, profitable underwriting practices and evolving risk management profiles.”
While this may sound like little more than an interesting item for insurance company investors, insurance is a great barometer of a country’s economy. Insurance represents security for businesses and individuals, a support structure that indicates a market is safe and there are elements to mitigate risk. Property owners know they can ensure their purchases and feel secure Knowing the company will still be there in a few years and a disaster won’t collapse the economy.
According to AM Best, Panama’s insurance segment expanded by 5.4 percent in 2017, just above the 5.3 percent gross domestic product growth. “The country has been a consistent growth engine for the overall Central American insurance market, which grew by an overall 7.1 percent in 2017,” according to the report. “It’s 29.3 percent regional market share by gross written premium (GWP) reflects its leading position, as Panama is an important driver of the region’s premium volume for life, automobile insurance, and health.”
The health segment has seen the biggest increase and there also has been a big improvement on the risk side of the industry, AM Best reports.
“The industry’s enterprise risk management (ERM) framework has benefited from a regulatory regime that focuses on the prevention of money laundering and corporate governance, to close loopholes and minimize financial risks,” according to the report, which add that “further improvements in the industry’s ERM framework will safeguard the financial strength of Panama’s insurance industry.”
