Colombia, among Latin America’s more advanced insurance markets, is seeing growth increasingly driven by the life insurance sector, according to a new AM Best report.
From 2020 to 2024, non-life premiums rose from roughly COL 15 trillion to COL 26 trillion, whereas life premiums climbed more sharply, exceeding COL 30 trillion in 2024.
“Colombia non-life premium growth has been steadier, reflecting more-frequent policy renewals and localised underwriting capabilities,” commented David Lopes, Senior Industry Analyst, AM Best. “Life premium growth stalled in 2023 due to heightened sensitivity to economic shifts, but rebounded sharply in 2024, with growth returning to around 15%, reinforcing its emerging role as a primary engine of market expansion.”
AM Best’s analysis highlights a notable increase in financial leverage among non-life insurers, with debt expanding faster than capital and surplus to nearly match the COL 8 trillion capital level in 2024. This pushed the debt-to-capital ratio close to 100%, raising concerns about risk tolerance and potential regulatory scrutiny if earnings or capital buffers weaken. By comparison, life insurers maintained a more moderate debt-to-capital ratio of 55% in 2024, according to the report.
Operational enhancements have reinforced the non-life segment, bringing its combined ratio down by more than 40 percentage points over the last five years to 74% in 2024. AM Best links this progress to stronger claims handling, tighter expense control, and shifts in business strategy that have collectively lifted overall profitability.
Both life and non-life insurers continue to contend with investment pressures tied to market swings, higher interest rates, and markdowns on fixed-income holdings. According to the report, a steadier performance in international and domestic financial markets, combined with easing inflation, could help lift investment results and, together with solid underwriting outcomes, set the stage for measured, consistent growth across the sector.
“With life insurance poised to lead market expansion, Colombia’s insurance market appears to be entering a phase of balanced growth, with increasing resilience against cyclical and structural challenges,” added Lopes.
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