Dominican insurance sector’s outlook remains stable: Fitch

Santo Domingo.- The Central American and Dominican Republic insurance sector’s outlook remains stable for 2016, according to Fitch Ratings in a new report.

Fitch said the stable outlook is based on favorable growth rates for insurance markets in the region, along with the projected positive economic growth. The outlook considers the strengths that the insurance markets continue to show in terms of capitalization and liquidity.

However, the rating firm said that a higher frequency of catastrophic events, along with higher inflation rates and currency devaluation in some countries, still pose challenges for the region.

Fitch estimates nominal growth (in US dollars) of 4.8 percent in premium underwriting for Central America and the Dominican Republic at the end of 2015, comparing unfavorably to the 8.2 percent registered in 2014.

Fitch also said believes that profitability in property and casualty insurance lines will be challenged by highly competitive rates promoted by favorable conditions in the international reinsurance market.