the wages of INDEPENDENCE
Reform has made it far easier to start insuring employees of private firms doing business with the state.
What has driven Latina Seguros’ success in such a competitive business?
Latina Seguros is the oldest company in the local insurance sector, having been incorporated in 1879 and even issued a policy for one of the most prominent presidents in Ecuador’s history, Eloy Alfaro. After several merger and acquisitions involving companies from different countries, Latina Seguros took its current form in 2003. We then decided to focus on sustainable growth instead of issuing as many policies as possible. The key to our success has been consistency, our emphasis on quality rather than numbers. Ecuador’s insurance sector is marked by the presence of many players, including local and international competitors, and our company is today among the 10 largest companies in Ecuador. It is possibly among the three largest if we look at financial results. The company is strongly focused on having healthy balance sheets, and we count the largest amount of offices across the country. This has been coupled with digitalization efforts. Most of our insurance policies are filed through an electronic system. In terms of electronic processes, Ecuador is well advanced in making the market more sophisticated in that sense. As such, we have worked to boost the electronic services of our products for over a decade.
How does the Ecuadorian market compare to others?
Ecuador is not that different to others in Latin America. In the US, people spend 12% of their monthly income on insurance policies. In Europe, it is even larger. In Latin America, however, insurance companies hover around 3% of GDP, which is low compared to the ratios of the developed world. In Ecuador, we are among the two largest companies in the vehicle segment, which is one of the products with highest penetrations in LATAM countries. However, we want to progressively include other segments, including corporate, as well as life and health, and keep innovating in terms of products to keep up with market demands. Medical responsibility products are performing well in the market. We are launching an insurance to cover the responsibility of lawyers. There are opportunities to launch those products in Ecuador, which exist in other countries. As a society develops, the size of the insurance sector increases.
Companies doing business with the public sector now have the possibility to choose any insurance company in the market. How are you specifically targeting this segment?
After this decision by the Ecuadorian government, we see huge opportunities in expanding our presence in the segment of private companies doing business with the state. Additionally, a huge opportunity is being untapped, now that public entities themselves can also choose their insurance provider. As a matter of fact, when a company is the only one that participates in a market, prices rise and the quality of the product decreases. Open market competition, however, brings a completely different situation.
What are your plans for 2020?
For 2020, we are focusing on growing in the corporate and public sectors. The company will seek to increase in the life insurance sector and have more specialized products with a good performance. The insurance sector in Ecuador is healthy, and we need to keep working to make it more competitive. Thankfully, institutions in Ecuador are gaining more and more independence and becoming more aligned with what needs to be done at a regulatory level to be competitive internationally. ✖
Oldest company in Ecuadorian insurance sector Among Ecuador’s 10-largest companies in the insurance sector