Features
26 Nov 18

Increasing insurance in Colombia

Insurance in Colombia are on the rise, according to the 1st semester report of Fasecolda’s, the sector federation of insurances in Colombia. 

SOAT

In Colombia, various types of insurance apply regarding road traffic. There is SOAT, the mandatory third-party vehicle insurance for personal injuries caused in traffic accidents, addressing all victims of traffic accidents, from driver to pedestrian, regardless the one who’s responsible for the accident. 

Considering SOAT, Fasecolda counted 7.947.063 issued policies for 2017 in Colombia. Between 5 October 2017 and 31 March 2018, a total of 1,464,862 electronic SOAT-policies were issued. Nevertheless, a third of all cars in Colombia do not have SOAT. 

Good to know: as from January 2019, only the new SOAT formats will be issued.

Car theft

Besides insurance for personal damage, a driver can insure its car for material damage as well, in case of being involved in a traffic accident or in case of theft. 

According to Fasecolda, less than 40% of the vehicles registered in the RUNT (Registro Unico Nacional de Transito) in Colombia, have this kind of voluntary insurance. In total, the Colombian car park is composed of 14 million motorised vehicles; only 2% of the 8 million registered motocycles has adequate insurance, and less than 40% of the other motorised vehicles. Further on, Fasecolda states that of the 2.38 million cars with voluntary insurances in June 2018, 81.6% were for light vehicles, 7.5% motocycles, and 10.9% heavy vehicles. 

According to a report by Automotive and Car Parts Association (Asoparts), 70% of the vehicles in Colombia are not assured against specific events such as theft; even though, in 2017, more than 30,000 cars and motorcycles were robbed. The Nacional Police calculated that theft of vehicles increased from June 2017 to June 2018 by 15%, according to Fasecolda.

Digitisation

Nevertheles, Fasecolda sees that car insurance in Colombia is on the rise. Helpful are companies such as segurocanguro.com which provides a digital platform to facilitate convenient access to car assurance, something which is increasig the number of these insurance policies. Since its launch in 2015, the company reached a yearly growth of 500%. Overall, the insurance sector increased an average of 11% in the last 4 years. According to Fasecolda, this can be explained by the rising middle class, and the historical low insurance rate in Colombia.  

Eventually, increased digitisation and a growing insurance ‘culture’ are considered as the two major driving forces needed to enhance the sector and, in turn, the insurance rates in Colombia. The SOAT, for example, can now be bought via the internet, rather than only in person like in the past.

Authored by: Fien Van den steen