|
Erika Díaz |
In July 2008, the Insurance Market Regulation Law (LRMS) broke the monopoly that existed in Costa Rica for more than 80 years, which allowed only one state company to carry out the country´s insurance operations. The LRMS also created a supervisory authority in this matter, the Insurance Superintendence, which supervises the newly-opened market. The opening up of the market has allowed the participation of several insurance companies, achieving product diversification and interaction with several financial sectors, including the banking sector. This interaction of the banking and insurance sectors has allowed both to achieve significant growth over recent years, thanks to a wider variety of banking services. The insurance market has taken advantage of the success of credit portfolios managed by these banks.
The influence of the banking sector has increased as a result of offering new services, and greater lending capacity. At the same time, the growth of insurance activity within the banking sector is down to the fact that the clients, through bank credits, the use of credit cards and savings accounts, are able to enter into lower-cost insurance contracts with fractional premiums. This allows them to obtain cover for simple risks related to certain banking operations, at the same time as death risks linked to bank credits.
Therefore, the successful growth of these sectors is not only based on an increased awareness of insurance issues in Costa Rica, but also on the varied service selection that both markets offer. The Costa Rican insurance consumer has become a significant player in the financial market.
Erika Díaz