Miguel Gómez Martínez, President, Federación de Aseguradores Colombianos (FASECOLDA)

Faselcolda believes the Colombian insurance industry will reach people who have never had coverage before as a result of the innovation spurred by the crisis.

BIO

Miguel Gómez Martínez holds a bachelor’s and master’s degree in economics from The Paris Institute of Political Studies. He is currently a PhD candidate at the Center for Diplomatic and Strategic Studies (CEDS) in Paris. Before becoming president of Fasecolda in 2020, he held roles such as president and general manager of Asocolflores, economic advisor for the Ministry of Commerce, and president of Bancoldex. He was also dean of the faculty of economics at the Universidad del Rosario and a professor of economics at the College of Higher Administration Studies (CESA). Additionally, he has been a representative to the Colombian congress, ambassador to France, and a print press columnist, among others.

As President of Fasecolda, how would you assess the local insurance sector’s performance in 2020, and what were the main challenges and opportunities for growth?

The pandemic has encouraged innovation in matters of business operation, coverage, and risk assessment. We have identified efficiencies that have positive impacts on our sector and will benefit policyholders, providers, intermediaries, and reinsurers. Keeping in touch with customers has been one of the main challenges. This was quickly understood by not only insurers, but also the different industry actors—intermediaries, reinsurers, the supervisory authority, and the regulatory entity. The national government has imposed strong periods of isolation since April, and the industry has stepped up to the associated challenges, especially in terms of client relations. The crisis has been a catalyst for various projects that seek to make insurers more accessible to policyholders, not only for policy provision but also the management of claims. Our task as the insurance sector is to identify new protection needs. Product development has focused strongly on updating workers’ compensation insurance. Companies must recognize the new risks for workers in industries that have been permanently changed by the pandemic. Inclusive insurance will benefit from the innovation spurred by the crisis. The Colombian insurance industry will reach people who have never had coverage before through products that satisfy extremely specific needs that could not be easily identified and met in the past. All these opportunities require the sector to adopt an innovative approach in risk analysis, pricing, and proper reinsurance coverage. The risk and actuarial areas of companies are being changed to migrate from the traditional models of frequency and severity to data analytics, the internet of things, and AI. We expect deep and faster transformations in the next five years than those that have occurred in the last 20 years in the sector.

In what ways has Fasecolda changed internally to remain effective and operational?

Fasecolda has a light operating structure that allowed us to adapt quickly to new working conditions. In a few weeks, we managed to have the entire team remotely connected and meet the requirements of our affiliates. We strengthened the internal and external communication channels to keep cohesion in the different workgroups, provided employees with the necessary elements to carry out their work from home, and started a project to identify opportunities for improvement in different topics

such as leadership and teamwork. We also provided support to our staff on adapting to change, communication, and psychosocial risks.

One of the major priorities for insurers is raising the level of penetration so that all Colombians have access to insurance. What are your strategies for achieving this?

Insurance penetration in Colombia is below the global average, which is around 7%. However, our country is a leader in Latin America, with a penetration close to 3%, the region’s average. The national insurance industry is firmly committed to expanding the coverage of risks for Colombians. To this end, Fasecolda has been developing the Más seguro, más futuro (Safer, more future) program since 2016 together with the government program Banca de las Oportunidades. This public-private initiative aims to identify and remove various supply and demand barriers that limit the access to insurance for Colombians who, traditionally, have not been protected against different risks. The focus is on strengthening access to innovative, simpler, and more affordable insurance products that are tailored to people' s needs. Inclusive insurance is the spearhead of the industry to deepen the penetration of insurance in society. We have been fortunate to have the committed collaboration of the national government through the supervisory authority and the regulatory entity. In order to expand the public’s knowledge on insurance issues, Fasecolda leads the financial education program of the insurance industry, Viva Seguro (Live safely). It has different tools that allow all current and potential insurance consumers to understand the importance of managing their risks properly and make healthy financial decisions regarding access and use of these products.

Which trends will be key for the insurance sector going ahead?

In order to promote and facilitate the innovation and digital transformation processes of the insurance industry, Fasecolda, through the National Insurance Institute (INS) and the Colombian Insurance Foundation (Fundaseg), hired PricewaterhouseCoopers (PwC) in 2019 to carry out a research on the prospective vision and training needs of human talent for the future of the insurance industry in Colombia. Eight challenges were identified: the speed of technological change; the difficulty in attracting and retaining the right human talent; the protection of sensitive data from cyberattacks; natural disasters and environmental protection; changes in consumer behavior; new competitors and ways of competing; lower profitability of investments in a scenario of high operating costs; and the timely adoption of standards and regulation. Although these challenges imply important changes in the sector, they bring opportunities for innovation. To translate the challenges into opportunities, the insurance industry needs to undertake the journey of digital transformation. A model of strategic and managerial thinking that, although supported by technologies and information, requires ensuring digital capabilities in human talent and a corporate culture ready for change.