Ms. Jung, why is Allianz only just discovering Latin America?
Helga Jung: It’s not a new discovery. We arrived here decades ago. Today, we are not only well positioned, but are also successful in Argentina, Brazil, Colombia and Mexico. These countries have been demonstrating particularly substantial growth over the past few years, and I do not believe that this development looks set to end.
Brazil was certainly the growth engine driving the region for a long time - but the engine started to stall last year. What will Allianz do if growth in Brazil comes to a standstill?
There is still huge potential: on the one hand, the population of just shy of 200 million is young and growing fast. Around half of the population now belongs to the middle class. This growing prosperity is important to us as an insurer as well, because it also boosts the demand for insurance products. On the other hand, Brazil is the world's seventh-largest economy, but only comes in 33rd in terms of insurance penetration. In 2020 Brazil will become the 8th most important insurance market worldwide measured in GWP1. Being 15th placed in 2010 Brazil, according to this projection, will more than quadruplicate its volume. This really highlights the huge business potential in Brazil - but also for the Latin American region as a whole. So from my point of view, this growth story is far from over yet.
How do you want to benefit from these rising levels of prosperity?
We are using special products to try and attract customers who are not yet rich and affluent. We believe that it is important to offer customers the right products early on, and then continue to accompany them along the way. In Brazil, for example, we are offering term life insurance that costs the equivalent of around 4 euros a month. If the policyholder dies, his or her heirs receive not only the burial costs, but also an amount to help them with the cost of living for six months. This makes sure that families are provided for at first. We are also keen to use information campaigns to raise awareness of the basic need for provision and long-term protection. This helps individuals to maintain the level of prosperity that they have achieved.
How has Latin American region as a whole developed over the past few years?
Although Latin America did not escape the global economic crisis of 2008 entirely unscathed, the region weathered the crisis well in comparison to the rest of the world. Thanks to economic policy that focuses on stability and stable institutions, the last ten years have seen an economic boom. That has benefited the insurance industry, too, which has experienced a huge growth surge in recent years, with the trend continuing virtually unabated in the new decade. This shows that the region has increasingly been transformed into a major economic center.
What makes this region in particular so attractive for Allianz?
In short: the growth potential. In the past three years alone, we have consistently achieved an average double-digit growth in gross written premiums and our operating profit in all of these markets. Last year once again saw Allianz making substantial progress in Latin America. Total gross written premiums in the region were up by 18 percent to a total of 2.6 billion euros, and we sold 15 percent more policies than we did a year before. All in all, our results in Latin America are very satisfying.
What sort of business is Allianz doing in this region?
We are represented in four markets: Argentina, Brazil, Colombia and Mexico. We mainly sell property and casualty insurance in these markets. In Brazil and Colombia, we also rank among the leading providers of health insurance. And we also offer life insurance in Mexico and Colombia. We have already positioned ourselves with a very broad product range in this growth region in recent years.
What is your outlook for Latin America?
I'm optimistic. With increasing prosperity and an aging population, there will be more and more demand for insurance and old age provision products in Latin America. Our aim is both to offer a range of products that meets the varying needs and demands of all of our customer segments and to raise our profile in these areas at the same time. As a result, we will continue to expand our presence in Latin America organically.
How do you see the recent public protests in Brazil?
Over the last weeks we have seen mass protests, coordinated via social media, for a better public health - and school system. Important issues are also circled around public spending and corruption. The government is currently working on a political reform that upgrades public participation in the political decision making process. The demands of the movement will not vanish. Rather they will be included into elections campaigns – federal elections in Brazil are scheduled for October 2014.
1 Source: MunichRe Economic Research
