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Twenty-six P&C insurers and 26 life insurers operate in Panama, according to H1 data from the country's sector regulator SSRP.
Panama is also home to seven authorized reinsurers, among them Alliance Re Reassurance Suisse, which SSRP this month took administrative control of for a provisional 180 days.
The reinsurer, which was awarded its license in 2008, had US$1,633 in capital, well below the US$1mn minimum required, according to an SSRP resolution. The firm also failed to provide a financial report for 2015 and failed to register operations corresponding to a two-year period.
Local paper La Prensa reported SSRP chief José Joaquín Riesen as saying he had no knowledge of the company having active contracts with insurers and, therefore, the impact on the local market should not be major.
Nearly 130 non-resident foreign reinsurers also have representative offices in the country.
Panama is a renowned global banking hub. On a regional scale, it is also a major player in terms of insurance.
"Panama is a regional front-runner in terms of the development of its insurance industry, with levels of insurance penetration and density in the country significantly higher than the majority of Central American nations," BMI Research, a Fitch Group company, said in a July report.
Premiums have been increasing for at least the past few years and growth is forecast to continue.
BMI projects that gross life premiums written will total US$354mn this year and US$422mn in 2021. Gross non-life premiums written are expected to total US$1.225bn this year and US$1.644bn in 2021.
"Against a robust economic backdrop, we forecast both markets to continue growing at a brisk pace through the forecast period [2014-21], with premiums growth comfortably in the mid-to-high single-digit range. The fragmentation and competitiveness of the market means there is significant scope for companies to increase their footprint via mergers and acquisitions, as well as through organic means," it said.
BMI cited the comparative affluence of Panamanians and the presence of multinational players in the country.
PANAMA'S TOP 5 INSURERS BY TOTAL PREMIUMS WRITTEN
No. 1 & No. 2
Based on H1 figures, ASSA was the biggest overall player, with about 18.1% of total premiums written. ASSA was also the leading P&C insurer (20.8%) and the country's No. 3 life insurer, with a 15.3% share.
This quarter Italy's Generali entered into an agreement to sell its operations in Panama to ASSA for US$172mn. If the deal goes through, based on H1 figures ASSA would command a 25.7% market share by total premiums written, extending its lead over the Mapfre unit, which in H1 had a 16.4% market share, earning it the No. 2 spot.
In third place was local P&C and life insurer Compañía Internacional de Seguros, which accounted for 15.6% of total premiums written. This year the company acquired Panama's Aseguradora del Istmo (Adisa).
In fourth was the local unit of Colombia's Seguros Suramericana which commanded a 9.13% market share.
In fifth was the local unit of New Orleans-based Pan-American Life, which had a 9.09% share.
PANAMA'S AUTHORIZED REINSURERS
The country has seven authorized reinsurers. In April, authorities, citing a "critical liquidity situation" ordered the liquidation of local reinsurer Istmo Re. Prior to the intervention, according to rating agency AM Best, Istmo Re had "provided the regulators with an action plan dated September 5, 2016, under which it would sell its assets and reduce its outstanding debt over a three-month period. However, as of December 1, 2016, no actions had been implemented."