AM Best is maintaining its stable outlook on Panama’s insurance industry, citing consistent premium growth and consistently profitable underwriting following the adoption of IFRS 17 accounting standards.

The new Best’s Market Segment Report, “Market Segment Outlook: Panama Insurance,” also notes Panama’s sound fundamentals reflecting a dollarized economy, low and stable inflation levels, and continued functionality as a regional logistics and financial services center. The country’s gross domestic product expanded by 4.4% in 2025, according to the IMF.

While the Central America country’s economic factors look favorable, ongoing challenges exist on several fronts, including the fiscal regime, pension system imbalances, climate change shocks impacting the Panama Canal, social turmoil, and closure of the Cobre Panama copper mine, which previously accounted for approximately 5% of GDP.

Panama’s regulatory landscape continues to develop following the official implementation of IFRS 17 by the Superintendencia de Seguros y Reaseguros de Panama (SSRP), which took effect in January 2025. “The SSRP also has updated corporate governance guidelines regarding key board and committee factors, and publicly announced its Risk Based Supervision, providing a framework to safeguard the overall insurance industry,” said Salvador Smith, associate director, AM Best.

Other takeaways from the report include:

• Direct business in Panama’s insurance industry expanded by 7.1% in 2025, based on gross premium written, reflecting consistent technical profitability. With a combined ratio below 100 in 2025, underwriting results remain healthy and consistent with historically sound performance.
• The health line of business leads the domestic insurance industry, expanding 7.9% in 2025, above the country's GDP, driven by continued medical inflation and technological disruption/innovation in treatments, increased frequency of long-term chronic degenerative diseases, and the population’s preference of private health coverage resulting from a limited public health system.
• Panama’s auto segment expanded by 8.2% in 2025, owing to increased motor vehicle sales and financing, coupled with higher insurance rates partially resulting from inflation and a surge in claims.

To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=366971.

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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