Claudia González President, Asociación Colombiana de Corredores de Seguros (ACOAS)

ACOAS liaises with the government and the regulator to advance the insurance sector and subsequently improve insurance coverage for Colombians.

BIO Claudia González has over 25 years in the Colombian public sector occupying highprofile roles such as legal secretary to the presidency and general secretary of the Ministry of Finance. She has also worked on important developments in Colombian public policy with roles in the Prosecutor’s General Office and the National Office for Strategy and Planning. She is a lawyer specialized in finance law. What did the insurance industry in Colombia face in 2020?

The insurance industry in 2020 experienced a transformation, though not as deep as we had thought. Some insurance areas were strengthened, while others experienced a process of adjustment. In life insurance, there was significant growth because the pandemic brought attention to the importance of purchasing a policy, and current life coverage has increased from 30% to 45%. One specific impact of 2020 was on car insurance. Typically, clients bought car insurance for an entire year, but because of COVID-19 restrictions, there was an adjustment to this insurance, and customers no longer pay a fixed annual rate but a variable rate that depends on mileage. This is a part of a trend in the development of insurance products in 2020. Products are becoming increasingly tailor-made and specific to the holder’s use. The regulatory framework must adapt to the reality of the insurance sector, its products, and processes. 2020 has expedited the digitalization process for insurance purchasing. What are your views on that matter?

The digital transformation of the insurance industry has been significant. People are insuring their assets digitally, which brings about advantages and disadvantages. For example, retailers are offering insurances on online purchases to cover the item’s delivery. In such transactions, the retailers are working as insurance companies despite not being under the supervision of the regulator, the Superintendencia Financiera de Colombia (SFC). This is troublesome because they do not comply with the safety and consumer protection protocols that are required for insurers.

What can be done to improve the Colombian insurance ecosystem?

2020 was a catalyst for innovation; however, there is room for improvement. An important ambition for brokers is expediting processes through improvements in the operational framework. Protocols must be updated to facilitate digital adherence. An example of how the regulatory requirements are burdensome for brokers is the anti-money laundering form, SARLAFT. An average family has four insurance policies, and every time a family purchases insurance, they must go through the entire SARLAFT process, which involves a great deal of paperwork. We are proposing the creation of a single database on SARLAFT so that holders do not have to repeat the process. The idea is to reduce redundancies. In 2021, we should focus on improving

data collection systems. Another thing that needs to be improved is the issuance of digital invoices; eight out of 10 insurance policies have some type of mistake, and the invoice needs to be reviewed. We must liaise with the National Directorate of Taxes and Customs (DIAN) on this objective to prevent errors and streamline the process.

How do you evaluate the response of the insurance industry and brokers to the pandemic?

The response to the crisis has been excellent. ACOAS recently conducted a study on the quality of the service, in which we evaluated insurance companies and labor risk administrators. The report will be ready in late January and accessible on our website. The results will be positive; quality indexes have not dropped despite remote offices and limits on in-person operations. The insurance sector has responded well to the requirements implemented with the pandemic and has managed to maintain productivity. For example, refunds for non-used policies have been reimbursed, evidence that the sector has remained flexible during abnormal circumstances. Product development and innovation has also been satisfactory. In auto insurance, coverage for vehicles was updated and now depends on mileage rather than on a one-size-fits-all system. This is representative of a commitment by brokers to innovate and extend products that are more useful and relevant to users.

How has access to formal banking helped increase insurance penetration?

Access and use of financial services is key to increasing insurance penetration. Every credit card has an insurance associated to it, for example. The country started a program to increase financial inclusion in late 2016, and financial inclusion has advanced in the last few years because the economy had performed well. When the economy grows, people have more economic resources and access to banking increases. Formal bookkeeping and payments through supervised means encourages a culture of preparedness and risk mitigation. Insurance products can also be extended more easily. A milestone that can, in part, be attributed to formal banking improvements are increases in the hiring of life insurance.

What role can ACOAS play in the sector to help its clients?

ACOAS can work hand-in-hand with the government in matters of regulatory framework, especially on topics relevant to the insurance sector. The association can also liaise with the Federation of Colombian Insurers (Fasecolda) to identify opportunities for coverage. It is important to understand the needs of the public in order to offer products that are useful and relevant. ACOAS is an institution that channels the needs and wants of Colombian brokers. This alignment contributes to the betterment of insurance coverage for Colombians.