Best’s News & Research Service - November 21, 2025 08:29 AM (EST)
Best’s Market Segment Report: Colombia’s Life Insurance Segment Leads Market’s Growth; Non-Life Insurers Face Rising Leverage Risks
- November 21, 2025 08:29 AM (EST)
//BestWire// - Colombia, which stands out as one of the more developed insurance markets in Latin America, has seen insurance market growth driven predominantly by the life segment, suggested a shift in dynamics, according to a new AM Best report.
The non-life insurance segment represents a larger share of market participants in Colombia and has benefited in recent years from rising demand in commercial, motor and liability lines. However, according to the Best’s Market Segment Report, “Colombia’s Insurance Market: Life Segment Leads Growth as Non-Life Faces Rising Leverage Risks,” the life segment has outpaced the non-line segment in premium volume and growth. From 2020 to 2024, non-life premiums rose to COL 26 trillion from approximately COL 15 trillion; however, life premiums climbed even more sharply, surpassing COL 30 trillion in 2024.
“Colombia non-life premium growth has been steadier, reflecting more-frequent policy renewals and localized underwriting capabilities,” 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.”
According to the report, non-life insurers experienced a notable increase in financial leverage, as debt grew faster than capital and surplus to nearly match the COL 8 trillion capital level in 2024, pushing the debt-to-capital ratio close to 100%. This elevated leverage raises concerns around risk tolerance and may invite closer regulatory scrutiny if earnings or capital buffers weaken. Meanwhile, life insurers’ debt-to-capital ratio remained at a more moderate level of 55% for 2024.
The non-life segment also has reduced its combined ratio by more than 40 percentage points over the last five years to 74% in 2024, driven by better claims management, cost efficiencies and strategic realignment, enhancing overall profitability and signaling stronger operational fundamentals. Both segments continue to face investment headwinds, likely driven by market volatility, rising interest rates and valuation losses on fixed income portfolios. The report notes that if global and local financial markets experience steady results and a decline in inflation, both segments could benefit from a rebound in investment performance, which, when coupled with continued underwriting strength, positions the industry for moderate, stable growth.
“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,” said Lopes.
To access the full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=360217.
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.