Although the insurance sector in Central America has made significant progress in recent years, it is impossible not to mention the points of improvement still pursued by the countries that make up this region. In order to trace an effective route that allows the achievement of certain objectives that provide Central America with a higher level of competitiveness compared to other regions around the world and that in turn provides better conditions for its customers, it is essential to detect the main problems that affect it today.
Below, we have some of the obstacles that require efficient treatment in Central America through active collaboration between the State and the business community in the insurance sector.
- Timidity regarding insurance
One of the factors that continues to hinder the growth of the insurance sector in Central America is the lack of initiative when hiring this type of service, resulting in situations in which the entrepreneur cannot respond effectively to unforeseen events that occurred either in the production chain or also during the transportation of their products. To have a better map of the current situation, we must compare the percentage of hiring in developed countries, which comes to be 8 and 12%, this being totally different in certain countries of Central America, where it has not even exceeded 3%.
- Lack of statistics on developments in the insurance sector
The lack of statistics and other reliable information on the current health status in the insurance sector is another obstacle facing this important region, since it is a major challenge to prepare efficient strategies to alleviate the current problems of the industry if there are no tools based on quality information. Among those most affected by this problem are countries such as Honduras and Nicaragua, as mentioned by Manuel Aguilera, of Mapfre Economics, in an interview with Bloomberg during the Agis 2023 Forum.
- The non-implementation of compulsory insurance
Another of the latent problems that affect the growth of the insurance industry in Central America is the weak or no requirement of compulsory insurance, which, on the other hand, are necessary in other countries of the world. To this it is relevant to add the lack of legislation regarding pensions, which clearly represents an obstacle in terms of achieving greater flexibility in the different packages for the user.
- The application of VAT in insurance
The application of Value Added Tax (VAT) when wanting to take out insurance in Guatemala, to mention an example, is another problem facing Central America because a simple increase of this type can mean the difference between hiring this type of services or dispensing with them. This is perhaps one of the biggest obstacles millions of citizens face when it comes to obtaining quality insurance that they can afford.
The insurance sector has a great impact on the different aspects of the economy, being the transportation industry one of them. With ONUS Insurance you will always get the best advice from experts knowledgeable in risk analysis and the best insurance for your cargo.