Pan-American Life President: Expansion Into Costa Rica a ‘Natural Step’

Pan-American Life Insurance Group said its subsidiary, Pan-American Life Insurance de Costa Rica S.A., has received final approval from the Costa Rican insurance regulator to operate in the country.

The move is "a natural step that supports the company's geographic expansion and regional strategic plan," Jose S. Suquet, chairman, president and chief executive officer of Pan-American Life Insurance Group, said in an e-mail. He said "entry into Costa Rica will complete our total coverage in the region."

Pan-America Life will offer a portfolio of individual health insurance, as well as group life, accident and health insurance products, the company said. Among the offerings is a new medical insurance product that will offer both local benefits, with access to in-country providers, as well as access to global medical networks and providers, including in the United States.

"The Costa Rican insurance market is ready for substantial expansion, and the growth potential is overwhelmingly evident when considering that Costa Rica's close neighboring personal insurance market, Panama, is almost four times greater in terms of premiums, even though both countries' per capita GNP are similar," Suquet said, noting Costa Rica has roughly 1 million people more than Panama. Costa Rica is currently Central America's second-largest insurance market behind Panama, where Pan-American Life has had operations since 1912, he said.

He noted Costa Rica recently approved a new law authorizing private competition in the insurance market. "The new competitive landscape in Costa Rica favors Pan-American Life, considering the company's 99-year history and the group's deep-rooted experience throughout Latin America," Suquet said.

Pan-American Life operates through branches and subsidiaries in six countries in the Caribbean Basin. The company benefits from its brand recognition in most of its markets, according to BestLink, which provides online access to A.M. Best's Global Insurance & Banking Database. Pan-American "will focus on growing its Latin American business through the expanded distribution and new products focused on the group and individual life market and individual health. Domestic growth will focus on work-site marketing to the U.S. Hispanic market," according to BestLink.

Pan-American Life Insurance de Costa Rica S.A. executive offices will be located in San Jose and will be led by Alfredo Ramirez, Costa Rica country manager.

Pan-American Life also has offices and affiliates in Honduras, Guatemala and El Salvador; and a strategic alliance with a leading insurance provider in Nicaragua to accommodate multinational clients, Suquet said.

Despite substantial barriers to entry for new companies, the increased attractiveness of Latin American insurance markets could potentially lead to increased competition in this segment, according to BestLink.

Pan-American Life Insurance Co. operates as a mutual life insurance organization and was originally formed to write business in the Caribbean basin, according to BestLink. The company also markets work-site business in the United States. Subsidiaries include Pan-American Assurance Co., a direct writer of universal life insurance, and International Reinsurance Co., a reinsurer of life and health insurance from Pan-American Life's associated companies and branch offices in Latin America.

The company received approval from the Louisiana Department of Insurance to reorganize under a mutual holding company structure in 2006. The reorganization was effective Jan. 1, 2007. Pan-American Life Insurance Co. and its affiliates operate under the umbrella name of Pan-American Life Insurance Group Inc.

Pan-American Life Insurance Co. currently has a Best's Financial Strength Rating of A (Excellent).

(By Rick Cornejo, managing editor, BestWeek: [email protected])