Risk managers demand better services for international programmes in Latin America

Speaking at an event organised by Commercial Risk Europe in Madrid, insurance buyers stressed that claims settlement and other issues related to their Latin American coverages remain a challenge. During the seminar, insurers stressed that Latin America is a region where insurance markets are heavily regulated and buyers must be willing to pay the right price for high quality service. The statements were made during the CRE Risk Frontiers-Spain-Going Global seminar held in association with IGREA and Apogeris that attracted more than 100 risk professionals to the Spanish capital.hideThe integration of Latin American coverages into global insurance programmes was a key focus of the event sponsored by MAPFRE Global Risks and XL. The region is vital for many large companies from Spain and across Europe. However, it has a number of different regulatory regimes, some prone to sudden changes, that create severe challenges for buyers and insurers alike. Leading insurance buyers said the market is learning how to deal with these challenges but improvement is still needed. Ignacio Del Corral, Risk & Insurance manager at Santander America, said that satisfactory solutions have reached the market but there is still much progress to be made in the way claims are settled and other services delivered. "As a buyer, I am very happy with the way that large insurance companies answer to our needs when it comes to designing an insurance programme with competitive conditions and so on," he said. "But the quality of services drop severely when it comes to the daily managing of the programmes." Such improvements would include a clearer definition of the responsibilities of each party-buyer, insurers and broker-in an international programme. More clarity on the possible setbacks that can occur during the settlement of claims would also be welcome. "Beyond capacities, beyond coverages, beyond the technical conditions of the product, we value the services that insurers provide us at the time of managing the programme," said Ramón de la Vega, head of Corporate Risk & Insurance at Telefónica. "And this goes for all items: the management of premiums, the management of claims and so on. What we ask from insurers and loss adjusters alike is an exquisite level of service concerning the whole programme process and especially in respect of the final client." In particular, Mr De la Vega urged insurers to ensure that any problems arising from a global programme can be solved directly between the lead underwriters and the corporate unit that arranged the cover rather than the local units. Bruno Laval, Regional Manager Iberia & Latin America at XL Group, pointed out that good services have a cost. He said the insurance industry is still developing methods to properly factor in all the costs involved in underwriting and managing international programmes in Latin America. Additionally, he noted that understanding risks in Latin America is an ongoing process in a maturing insurance market. "It will still take some time to get there, as the industry is working to build some more actuarial experience in the region to adjust rates to actual levels of risk. Going forward, I'm optimistic that we are on the right track," he said. Buyers appear happy with the price of coverage for Latin American policies. However, insurers are concerned that combined ratios stand at more than 110% in several of the continent's markets. They note that investment income, which has traditionally compensated for poor technical results for insurers in the region, are falling as interest rates decline in certain Latin American countries.

Risk managers demand better services for international programmes in Latin America

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