AM Best is maintaining its stable outlook on Panama’s insurance industry, citing its growth and consistently profitable underwriting results, which are expected to continue as companies navigate challenges due to the adoption of IFRS 17.

In its Best’s Market Segment Report, “Market Segment Outlook: Panama Insurance,” AM Best states that Panama’s insurance industry expanded by nearly 10% in 2024, following growth of 11% in 2023, based on gross premiums written (GPW). Panama’s insurance industry remains concentrated, with five companies accounting for more than 75% of the country’s market share. With a combined ratio below 100, underwriting results remain healthy, consistent with the segment’s historically sound performance; nevertheless, there are headwinds in acquisition costs stemming from reinsurance market hardening.

“Strict curbs on operating expenses and claims continue to boost underwriting performance, with the industry’s overall profitability still being supported by insurers’ historically conservative investment strategies,” said Salvador Smith, associate director, AM Best. “Furthermore, sound capital positions will help the segment withstand current economic pressures.”

According to the report, Panama’s economic slowdown in recent years has been underpinned by ongoing challenges in its fiscal regime, pressured public finances owing to the government’s significant dependence on Panama Canal revenue and material pension system imbalances due to depleting reserves. Disruptions in global commercial trade, coupled with climate change shocks that impacted the Panama Canal, ongoing turmoil in the mining industry and other potential external shocks, are headwinds for the region’s shipping and logistics hub. Given the persistent challenges the industry faces, AM Best will continue to monitor carriers’ performance.

To access the full copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=352477.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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