AM Best is maintaining its stable outlook on Costa Rica’s insurance industry due to steady premium growth and a stable regulatory environment.

According to the new Best’s Market Segment Report, “Market Segment Outlook: Costa Rica Insurance,” Costa Rica’s insurance market premium grew by nearly 4% year over year in 2025, due primarily to a 7% increase in mandatory insurance and a 3% increase in voluntary insurance. Despite increased claims volume, the overall period result for the market was positive, with no insurers reporting a net loss. Economic growth in the country is stable, although the conflict in the Middle East could place upward pressure on commodity prices and lead to higher inflationary pressures.

Costa Rica boasts a well-established regulatory framework for insurance since it the market was opened for companies other than Instituto Nacional de Seguros (INS), which holds 62% of market share in the market, to write mandatory auto and occupational injury coverages. Despite growing competition, pricing remains relatively stable. Climate-related risks are significant and catastrophe events, including Tropical Storm Nate in 2017, prompted product refinements. The country’s first parametric insurance policy was launched in May 2026.

“Demand for property and health insurance has grown steadily, driven by a rising middle class and foreign investment in tourism and real estate,” said Olga Rubo, associate director, AM Best. “However, many small businesses and households still forgo coverage due to affordability perceptions and trust in INS as a quasi-public institution.”

To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=365336.

To view current Best’s Market Segment Outlooks, please visit http://www.ambest.com/ratings/RatingOutlook.asp.

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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