At a turning point

The word on the street is that society’s involvement with technology advanced seven years in seven months thanks to the pandemic. This metric illustrates the state of innovation within the Colombian insurance industry fittingly, and also comfortingly since the improvements will contribute to the sector’s robustness going forward.

The digitalization of operations and market procurement processes are industry dynamics that will contribute to company resilience and competitiveness long term. Ultimately, these leaps expand access to insurance products for Colombians. At a penetration rate of 3%, the country lags behind the global average for insurance coverage. A 21st century approach to policy provision and management of claims means insurance will reach more people, more effectively.

Providers in Colombia are moving quickly to offer products that are clickable and that cover new and unconsidered risks. They are also strengthening their capacity for client relations and their ability to provide satisfactory service to policy holders. These changes are welcome. Although stay-at-home orders were their catalyst, these are permanent improvements to business.

Colombians now have new ways of acquiring polices and a supply of increasingly tailored products—data is bolstering product creation at unseen rates. Pay-per-use services and smart contracts are beginning to dot the websites of insurance providers in Colombia.

Miguel Gómez, president of the Colombian Federation of Insurers (FASECOLDA), explained that “innovative, simpler, and more affordable insurance products [will] deepen the penetration of insurance in society.” Accessing that untapped market of insurance consumers will unlock the potential that exists in the country and bring greater resilience to the Colombian financial system. Government support and a regulatory framework that is conducive to business will ensure that the industry escapes unscathed from pandemic-related drops in demand and lives to reap the benefits of innovation.

Third party liability vehicle insurance is compulsory in Colombia