Claims affected profitability for Colombian non-life insurers in 2022, according to a new Fitch Ratings report. Loss ratios for most of the rated insurers were up due to greater frequency and severity in auto, mandatory auto liability insurance or SOAT, and health claims, as well as the increase in the average cost of claims due to high inflation and the rising value of spare parts. The loss ratio for most was above levels reached before the pandemic.
In 2H23, the loss ratio of the main business segments (except SOAT) is expected to improve once the effect of a full year of upward adjustments in premium prices is seen, accompanied by more controlled inflation.
Fitch’s report includes an overview of currently rated companies, the macroeconomic outlook for Colombia and an overview of the most important factors in the industry. These include the composition of the Colombian market by company and business line, the development of financial performance after the pandemic affected period and the companies’ current levels of leverage are reviewed in Fitch’s report. In addition, the report analyzes the composition of the investment portfolio of the rated companies.