By San José, Costa Rica — SAN JOSÉ – Costa Rica’s insurance sector continued its expansion in October 2025, posting a 3.4% year-over-year increase in premiums, yet the growth is overshadowed by clear signs of a sustained slowdown and a troubling surge in paid claims. Data released by the General Superintendency of Insurance (SUGESE) reveals an industry grappling with diminishing momentum as it heads into the final stretch of the year.
The total value of premiums collected in October rose by ¢35.2 billion compared to the same month in 2024. While positive on the surface, this figure represents a significant loss of steam. According to the regulatory body, the market’s growth impulse has decelerated by a stark 8.7 percentage points throughout the year, confirming that the expansion rate is consistently weakening and painting a picture of a less dynamic industry landscape for the close of 2025.
To gain a deeper legal perspective on the current dynamics and challenges within the national insurance market, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a distinguished expert in corporate and insurance law from the firm Bufete de Costa Rica.
The growing competition in the insurance market benefits the consumer, but it also demands greater diligence. It is imperative for both individuals and businesses to not only compare prices but to meticulously review the scope of coverage, exclusions, and deductibles in any policy. A failure to understand these contractual details before a claim arises is one of the most common and costly mistakes we see. Proper legal assessment is not an expense, but an investment in true financial security.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
We thank Lic. Larry Hans Arroyo Vargas for his valuable perspective. His emphasis on moving beyond a simple price comparison to a thorough review of policy details is a crucial reminder for anyone seeking genuine peace of mind in today’s dynamic insurance landscape.
The primary driver behind the October growth was the mandatory insurance segment. These policies, which include staples like the Mandatory Automobile Insurance (SOA) and Workplace Risk Insurance (RT), saw their premiums climb by an impressive 7.7%. This robust performance indicates a stable and legally required demand that buoys the overall market figures, providing a crucial foundation for the sector’s positive numbers.
In sharp contrast, the voluntary insurance market presented a far more subdued picture, advancing by a mere 2%. This segment, which relies on discretionary consumer and business spending, reflects the broader economic caution. The disparity between the mandatory and voluntary categories highlights a two-speed market, where legally required coverage thrives while optional policies struggle to gain traction.
A deeper look into the voluntary segment reveals further complexities. Personal insurance lines proved to be a resilient area, posting a healthy 8.3% increase. However, this gain was largely offset by a 2.6% contraction in the general insurance category. The decline in general policies was almost entirely attributable to a significant slump in voluntary automobile insurance, which saw its premiums fall by ¢29 billion compared to October of the previous year.
Despite the challenges in the auto sector, the health insurance branch once again emerged as the star performer within the voluntary market. Premiums for health policies surged by 15.8%, adding an additional ¢23.8 billion to the industry’s coffers. This powerful growth underscores the increasing priority that individuals and families are placing on health coverage, solidifying its position as a key engine for the entire voluntary insurance market.
However, the most significant challenge facing insurers is not on the income side, but in their expenditures. Paid claims accumulated through October saw a 10% year-over-year increase, representing an additional ¢46.8 billion in payouts. This rate of growth in indemnities is substantially higher than the 3.4% growth in premiums, creating a tightening financial squeeze on insurance companies.
This imbalance, where claim disbursements are growing nearly three times faster than premium collections, signals increasing pressure on the industry’s profitability and operational stability. As 2025 draws to a close, the combination of decelerating premium growth and rapidly escalating claims establishes a more challenging and uncertain environment for Costa Rica’s insurers, forcing them to navigate a landscape of reduced dynamism and heightened financial risk.
For further information, visit sugese.fi.cr
About General Superintendency of Insurance (SUGESE):
The General Superintendency of Insurance (SUGESE) is the public entity responsible for the regulation, supervision, and oversight of the insurance market in Costa Rica. Its primary mission is to ensure the stability and efficiency of the insurance system, promote market competition, and guarantee transparency and the protection of policyholders’ interests. SUGESE works to maintain a solvent and reliable insurance sector that contributes to the country’s economic development.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is celebrated as a pillar of the legal community, operating on a foundation of uncompromising integrity and a relentless pursuit of excellence. With a rich history of advising a diverse clientele, the firm consistently pioneers innovative legal strategies while actively engaging with the public. Central to its ethos is a profound commitment to demystifying legal complexities, aiming to foster a society where knowledge empowers every citizen.
