With the 2024 hurricane season in full effect, this time of the year is always interesting for the re/insurance industry due to the number of opportunities and challenges it poses for many different countries/regions.
Reinsurance News recently spoke to Martin Smith, President of Pro Global, Latin America (LatAm) about some of the biggest opportunities and challenges that the LatAm region is facing during this year’s season.
The first area Smith highlighted was automation, and specifically automation-based on bordereaux’s where the company is trying to support clients automating bordereaux.
“This is pre-event because in case there is an event and your new bordereaux’s are not automating, you will have to do a lot of work on manual bordereaux’s with thousands of claims/clients which generates a huge amount of work and a lot of inaccuracy and slows down the actions that you need to really take quickly,” he said.
Adding: “Another area is exposure management, and this is a service that Pro Global provides in other regions, which we are trying to bring to LatAm. This is more related to how you handle your risks bordereaux and have all geocodes and all the different structures, and changing of risk properly completed. So then you’re running your cat models on based on these bordereaux of risks and your exposure is probably not accurate if you are not having all these bordereaux of risk consistently completed and properly handled.
“The last one would be post claim. After an event one of the things we did find out because we did already collaborate with some UK reinsurers post hurricane Irma and Maria, and one of the things we found out is difficult for them is validating the claims. An area we would like to grow more within is supporting the reinsurers in, not exactly handling the loss adjuster, but by supporting the loss adjusters in all these processes.”
Moving away from the hurricane season, Smith was then asked a question regarding what areas ProGlobal are hoping to expand within across the LatAm region throughout the next couple of years.
“I would say that automation and reengineering of processes is something that we are actively pushing and we have done many projects in several countries, and again, we are really pushing to automate and we as Pro Global are sending a message to our clients that automation is not here to replace people, but to make things more efficient” he said.
“For countries specifically, if we look at Argentina, this country is coming from high inflation rates and now it’s starting to reduce. When inflation starts slowing down, you need to really shift that and become more efficient on a technical perspective because the financial result will not come with you. That is something that we (Pro) are really focusing on.”
Smith also added how Pro Global has worked on process projects in Mexico, Colombia, Argentina, Paraguay, Uruguay, Bolivia, and in Chile.
“Expanding in MGAs is something we are looking to do in LatAm. Of course, there are lots of facilities and MGA coverholders, but the main issue is that there is still no regulation in LatAm. There is some regulation in Brazil for MGAs on the direct insurance side and there is some regulation in Mexico. We are trying to support MGAs in the region with back office, claims handling, working capital, compliance and supporting them to find the adequate systems.
“We are hoping to expand our claims services too. We do handle lots of claims here in Argentina in our office. We do a lot of live claims and runoff claims portfolios, as well as long-tailed business that is still ongoing and then live claims for worker compensations and motor liability. We are looking forward to support additional reinsurers or other insurance companies in the region with claims.”
Focusing attention now on Brazil and Mexico, two of the biggest countries in LatAm, Smith addressed what trends the industry should expect to see continuing to take place within the markets of both countries.
He said: “Some of these markets are more mature and some of them are trying to follow foot with some of the trends being seen across the rest of the world and you’re only going to be able to grow or make more profit if you’re using technology on one hand, but if you’re using it properly and to become more efficient, so I would say that efficiency, technology, automation processes, I think there is some mix there. Also, using technology intelligently plays a vital role towards knowing how to approach markets differently.”
Adding: “I think there is a shift in Latin America because of delay of technology. They’re changing the consumers, the consumers for the car insurance, for the homeowners. The consumer will be shifting to the younger generation who want to hire insurance on the mobile application, while the older generation, are used to speaking with a broker. So I think in LatAm you will find some technology, I wouldn’t say which is replacing brokers, but changing the way how customers discover the best policy that is right for them.
“But still, I need to stress this, that in Latin America and in general across Brazil and Mexico, from my perspective, these are still brokers markets.”
