Innovative and needs-based
"The Term Life & Maternity insurance once again highlights Allianz's ability to offer product solutions that are tailored to meet certain needs and specific financial capabilities," says Ignacio Borja, CEO of Allianz Colombia. He continues: "In the long term, microinsurance can help to allow Allianz Colombia to continue on the successful growth path it has been following over the past few years."
Lack of access
People in Colombia are certainly aware of how much sense insurance makes and how it works. Health insurance, for example, is mandatory. What Colombia is lacking is access to insurance products for people and an effective sales structure. "Our aim is to ensure that every single person in Colombia has access to insurance products," is how Ignacio Borja explains the strategy pursued by Allianz Colombia.
Potential
The growth figures for the recent past are testimony to the potential the market offers. Over the past two years, gross written premiums have risen by more than 20 percent. Allianz Colombia is aiming to achieve double-digit growth in the future, too. The country certainly offers the right conditions for this to happen. At a good two percent of GDP, the insurance penetration rate is still very low, even compared with other Latin American countries. At the same time, however, the demand for insurance products is rising thanks to increasing prosperity and the emergence of a middle class. "Sales are, and remain, the biggest challenge," says Ignacio Borja.
Sales: a challenge
There is no uniform distribution network in Colombia. The Term Life & Maternity Insurance, for example, can only be distributed via the Microfinance Institution (MFI). The MFI ensures that the microinsurance only benefits the financially deprived. Property and casualty products, on the other hand, tend to be sold via a number of large brokers. Finally, life insurance is mostly distributed via brokers and agents. Allianz is well positioned in this segment, with a current total of around 2,500 agents. The number of agents is to be increased considerably over the next few years.
Investments running into the millions
In order to give people in Colombia easier access to insurance services, Allianz Colombia has invested more than 15 million euros in the technical capabilities of its systems over the past two years. The launch of the IberoLatam business platform has laid the foundation for more efficient sales and claims settlement. This should also have a positive impact on profitability. Allianz Colombia is aiming to achieve a combined ratio of around 97 percent next year. Four years ago, this ratio was still sitting at 105.5 percent.
Sustained growth
The foundation has been laid, offering favorable conditions for further profitable growth. Over the past few years, Colombia's economy has been outpacing Brazil, achieving growth of a good four percent of late, a development that experts believe will continue. People also want to protect their increasing prosperity, which means rising demand for insurance services – both in the conventional insurance business and for microinsurance.
