Juan Enrique Bustamante

PRESIDENT, SEGUROS MUNDIAL

Why was 2020 a pivotal year for the Colombian insurance industry?

The pandemic accelerated many changes for the insurance industry in terms of processes. Seguros Mundial’s aim is to constantly transform our products and services to best meet the needs of our clients; therefore, 2020 was a boom year for digital processes and services. COVID-19 accelerated the sector by seven times because people could not leave their homes during the heaviest quarantine periods. In Seguros Mundial, we managed to offer a strengthened number of digital products remotely by means of telephone or videoconference. As a result, we started improving our digital capacities to create solid alternatives for our clients. The pandemic also contributed to a careful evaluation of how insurance solutions are extended to the public. Digitalization has been a trend across the Colombian insurance industry, and the company began to re-think its business and structures. Crises have winners and losers—the winners are those companies that have the highest level of resilience.

What was the effect of the pandemic on product development?

Colombia has not had rapid adoption rates of voluntary insurance. Induced insurances such as insurance on mortgages or mandatory insurances such as the SOAT are still the core focus of business. However, during the pandemic, people’s income were affected. The pandemic made people realize their priorities and helped them identify their main worries. Matters of health and death have taken central stage. For this reason, life insurance rose to a higher profile with the pandemic. Businesses affected by disruptions and closures have also realized the importance of protecting their revenue streams. One fundamental insurance during the pandemic was insurance on rents because tenants are failing to make rent payments. Because of COVID-19, demand for insurances to protect rent payments has risen. One trend in product innovation within the insurance sector is better flexibility. People want products based on use, where the user can determine payment. To this extent, for example, vehicle insurances is now available on a per use basis. There are also insurances by monthly subscription, customers can stop paying whenever they choose to.

What are your projections for the insurance business in Colombia?

In 2020, we will have modest growth figures. The hiring of certain insurance lines has fallen. Job creation has also fallen, which impacts business-oriented insurance solutions. The year will record slow growth figures in the industry of around 1% real. One determinant factor for the industry will be the reactivation of the economy. The economy has to be reactivated so people will start consuming again. Three months after the reactivation takes place, there will be a market boost. The company’s performance in 2021 should be better than in 2020. We are even expecting double-digit growth figures across some product lines.