Local in LatAm
FIDES is the most important insurance industry conference in Latin America (LatAm) in which insurance industry professionals from the region come together with those from around the globe to discuss the opportunities and challenges for the market. Ahead of this year’s meeting, which takes place in Chile, I want to share a few of my thoughts about where the industry is and how global insurers can transact business in the region.
Latin America as a whole has had a torrid year economically, although we have been trading throughout the region long enough to understand the need to look at each country within the context of its own particular circumstances. This has implications for the insurance market and makes it even more difficult to navigate than usual. But what great opportunities there are. The region is at the sweet spot position that large global insurers look for: there is increasing demand for specialist products from corporates, combined with strong regulatory and legal infrastructures. Yet at the same time the market still has room to mature with some corporate customers still not getting the most from their specialist insurance cover.
The local market is still dominated by local players which mean as a General Liability insurer from a large global firm I focus exclusively on facultative reinsurance. Even from a reinsurance perspective there is a danger of getting involved in a race to the bottom as rates plunge with the global excess of capacity. A good reinsurer has to be able to differentiate themselves sufficiently and have a unique selling point. Our focus is on delivering the best claims service in the liability market. I call our service the ‘Rolls-Royce’ of liability reinsurance claims. I want to give our clients the best service experience when they make a claim; this means us using the top lawyers and the best claims adjusters. I need our claims procedure to be the best in the business, and, with the right team in place to support our customers throughout Latin America, I am confident our reputation is growing strongly for our claims offering.
Contrary to what many say, the LatAm market is not homogenous. I often hear market participants arguing that because the continent, with the exception of Brazil, shares the same language; and because it has a similar culture – that a regional approach to doing business is how too many international markets approach Latin America. This is wrong. Regulation, the way of doing business and the challenges are different in every country in the region.
That is why as insurers our challenge is finding the best local partners. We’ve built a solid network of superb local partners including producing brokers, customers, loss adjusters and lawyers and have achieved huge penetration in certain markets. However, this does not extend to every country or every city so we’re looking to build on the success we’ve had by forming new strategic partnerships to broaden our customer base and look at new opportunities throughout the region. We have to go to every country, every province, and every city to seek out the very best service providers who know how to respond to issues according to local custom. This is the challenge we face when doing business in LatAm; ensuring that everywhere we have a client, we have an established relationship with the best service providers. And when we see a new piece of business we want to make sure we have the expertise we need in place to service it. I’m looking forward to getting to know local underwriters and other market participants from areas we have yet to explore.
So whilst I have come to FIDES this year looking for profitable business in the region, I am also looking to extend our relationships around LatAm that can help us to continue our first rate service to clients. I want to meet the local service providers, get to know the local underwriters and other market participants from even the most remote part of the region. And this is the lesson that huge multinational insurers have to learn. They may have the size and scale, which of course helps when underwriting, but when it comes to service, the only way to do business is to be local in LatAm.
Photo: Valparaíso, Chile, Flickr