How has the past decade been for the private insurance sector in relation to the region?
We established clear rules that opened the market from day one and leveled the playing field for all players. We learnt that it is crucial to not only push for financial inclusion and provide access to the banking and insurance systems, but also give people the tools to make decisions regarding adequate consumption and risk management. We have seen an annual growth of 9% in the insurance sector. Moreover, premiums have doubled and more importantly, claims paid to consumers have more than tripled.
Why would an insurance company choose to invest in Costa Rica?
The market still has a great deal of room to grow. Our market makes up 2.22% of GDP when it should be around 6% given the per capita income. In 10 years, the personal insurance market, such as health, accidents, and life, has grown seven-fold, and in those markets the participation share is much more distributed than in general insurance. Equally important, the rules are fair, and there are sanctions for all players, including the state company. These are signals that show local or foreign investors that the supervisor is impartial, and we have sufficient guarantees that the market is treated equally.
What trends do you see in the market, and what is coming for Costa Rica in the next year?
Within the framework of sustainability principles, the main participants signed a commitment document. The important thing is that these principles generate three working edges of government sustainability, social sustainability, and environmental sustainability. All regulatory development in recent years is in favor of seeking more robust management models. We are working on access and financial inclusion in the case of insurance. The subject of sustainability goes through the change in culture and by introducing appropriate practices to ensure fair treatment of customers. This is another aspect we will work on in 2019, forming a model of business conduct for the insurance market. Perhaps the clearest trend in the sector is that there is insufficient solvency because there is no capital that can endure bad management. Failing to meet a customer's expectations generates confidence problems for the client and market, slowing down development.
What is SUGESE's biggest contribution to the insurance market?
The important thing is to focus on the consumer; every action generated by SUGESE in the intervention market is with consumer at the center, ensuring the market provides added value. One of the important milestones of this road has been the issuance of a regulation that allows us to make important market corrections. These interventions have been important because it is about attending to a particular case; however, if that particular case generates a broader market issue, then SUGESE intervenes to help correct the market and ensure fair treatment for customers. Another important achievement is the risk-based supervision model, which incorporates excellent corporate governance and risk management practices for the insurance market; we must continue to give weight to these practices. Costa Rica is in the process of transitioning toward a solvency model, similar to the European one. In Latin America, Brazil and Mexico have adopted the same solvency model; Peru, Colombia, and Chile have been working toward that, and Costa Rica has been following suit. Along these lines, Costa Rica received a favorable opinion from the OECD's insurance and pension committee in 2017, because it was assessed that what the country is doing in the sector complies with OECD standards.
What has SUGESE done to promote an insurance culture?
We have successfully made insurance a subject of analyses and common culture when it was something completely unknown a few years back. This was done after a permanent marketing program that comprised two or three magazines a year, presence on social media, information stands, and so on.