Insurance Companies in Colombia: A Look at the Sector’s Growth and Contribution to the Economy

Insurance companies meet this week in Cartagena for the union congress. Gustavo Morales Cobo, president of Fasecolda explained the situation in the sector.

What have Colombians insured themselves with? What are the most active branches?

The ones that are growing the most are the automotive, engineering, which is the one that protects all machinery, constructions and others; and the fire branch. This indicates that employers are aware that it is always better to have insurance.

At Fasecolda we have coined a phrase that is, “a company has never gone bankrupt for buying insurance, there are thousands of companies that have gone bankrupt for not having insurance”.

He commented that insurance is sold to the Government, to companies, homes and individuals. What niche weighs more?, and in what percentage would you distribute them?

The ones that weigh the most are the companies, because they are the ones that insure the most valuable assets, their machinery and infrastructure, many companies even contract insurance for people, for example, when a company buys health, life or occupational risk insurance for its affiliates.

The business sector has a very important specific price in statistics, 50% companies, 30% state and 20% people.

How much does the sector contribute to the Gross Domestic Product?

It is 3.2% of the Gross Domestic Product of the country, which is destined to the acquisition of premiums, that is, to the protection of patrimony, life, health and the assets of our society. Five years ago it was 2.7%, but we were still a long way from the OECD average of 7.6%.

We still have room to grow and there is a direct correlation between the level of economic development and equality and the level of insurance penetration; For example, Korea, for example, has an insurance penetration rate of 11.6%, that is, the share of insurance premiums in GDP, which indicates the space there is for growth. The more insurance there is, the more equality and more protection.

What will the next Congress of the sector focus on?

It is about how the risks for the State, companies and people have multiplied. When processes such as climate, demographic, technological change and geopolitical uncertainty accelerate, it makes us deal with new risks or with aggravated traditional risks and the debate is about how to protect ourselves.