|Title:||Latin American share of insurance premiums by country in percentages for 2011|
Start of full article - but without data
Latin America - Market
Share of Premiums in
Individual Countries (2011)
Ranked by direct premiums
Argentina X.X% Chile X.X% Ecuador X.X% Honduras X.X% Panama X.X% Bolivia X.X% Colombia X.X% El Salvador X.X% Mexico XX.X% Peru X.X% Brazil XX.X% Costa Rica X.X% Guatemala X.X% Nicaragua X.X% Venezuela XX.X%
Sources: International Monetary Fund; Axco
Global Statistics; A.M. Best research.
Note: Table made from pie chart.
It was 1980, and Luis Maurette was just entering the Brazilian insurance market. It didn't take long for him to make an important industry observation.
"You have to localize your concepts," he said. "To do this, you need to understand the market, you need to have local knowledge and local employees and you need to understand the languages."
Now the chief executive officer of Latin American operations for Willis, Maurette is hoping to leverage his XX-plus years of local knowledge as he directs Willis through an anticipated growth spurt in the region.
With many of the world's more established economic markets going through crises and recessions, brokers such as Willis, the third-largest broker based on 2011 revenues, according to Best's Review's annual ranking of global insurance brokers, increasingly are looking to Latin America as an opportunity to expand their global footprints.
Latin America is attractive for its growth prospects as well as for its risk diversification. It is generally wealthier than other emerging regions and that wealth is expected to grow, according to Best's Special Report: Country Risk Issue Review (June X, 2012.)
"A.M. Best believes that the region, in fact, is one that could experience strong and sustainable growth rates over the foreseeable future," the report states.
"All of Central and Latin America is a very important part of our growth story," said Julian James, CEO of Lockton International.
"And that's driven for two reasons: first, because we've got an increasing number of clients who are investing in parts of Central and South America; and second, because we're very optimistic about the development of the insurance markets of domestic clients," James said. "So it's a very important part of the world for us."
While growth has sagged or stagnated in Europe and the United States, Latin America has offered brokers the prospect of double-digit growth.
"Latin America has been a growth engine for Willis over the last few years," Maurette said. "Other markets are going through severe crises, where things like recessions make it difficult to grow. Latin America is not immune from the global Financial turmoil, but it's still growing even though the pace has slowed down somewhat.
"When you look at the region overall, you see double-digit growth. That has been the case the last couple of years and should be the case going forward."
Maurette, who joined Willis last fall after serving as president and CEO of Liberty Seguros Brazil for XX years, sees the middle market as a prime target.
"The base of the economies in Latin America is in the middle market," he said. "There are also lots of local companies that are growing and expanding out of the local markets, to become international players. As a global broker, we can definitely add some value to these companies with our knowledge of and presence in the international markets."
Prosperity All Around
Marsh, the world's largest broker in 2011 according to Best's Review's annual ranking of global insurance brokers, draws XX% of its international business from Latin America and the Caribbean and has fully-owned operations in Mexico, Brazil, Puerto Rico, Colombia, Argentina, Venezuela, Peru, Chile and Uruguay. As it looks to expand--moving deeper into Central America and the Caribbean, in particular--it will continue to focus on industry practices such as infrastructure, construction, transportation, mining, and other important industry sectors in each of these countries, and risk specialties including employee benefits, auto, marine cargo surety, property and casualty.
"The great thing in the region is that just about every single country is doing very well," said Ricardo Brockmann, Marsh's CEO of Latin America and the Caribbean. "The GDP is growing in every single country. So, although we are focusing on Brazil and Mexico, we're also looking at all the other countries. We're really in expanding mode at this point."
Globalization has been the biggest change Brockmann has seen during his XX years in the Latin American insurance industry.
Born into an insurance family, Brockmann joined his father's broking business in 1979. Brockmann y Schuh, which was formed in 1960 and grew to become the largest broker in Mexico, was generating $XX million ha revenues annually and had a staff of nearly XXX when it was acquired by Marsh in 1998.
But when Ricardo Brockmann joined the family business, the focus was still very provincial.
"Thirty years ago our clients were companies that were basically competing against other companies in their own region or own country," he recalled. "Now all the major companies have gone global. So it's really important for us to make sure we can reach them in any part of the region, using the best technology we have in the industry, in order for them to compete, because they're now competing against companies from all over the world. In the past we had to solve very local issues, and now we need to make sure they're competitive on a global basis. So it's a big change."
The globalization of the businesses has altered the Latin American insurance landscape.
"In the last XX or XX years, just about every single major company that works in insurance is here," Brockmann said. "One way or another, they are represented ha Latin America or they have their own operations. Thirty years ago, I would say there were probably two or three global markets present (in Mexico), but most of the markets were local companies. Now just about every single major operation is in the region.
"Maybe I'm wrong, but I don't think there has been any other region that went through that. It's been great in the sense that the competition has allowed for us as brokers to bring to our clients just about anything that exists in the world. Just about anything that exists, we can bring it to our clients in Latin America."
Different Roads to Growth
The strategies for expansion vary by broker. Lockton, ranked No. XX in Best's Review's annual global broker ranking, has tended toward organic growth.
"That's very much the Lockton style of doing business," James said. "Does that mean we'll never consider an acquisition? No, it doesn't. We'll look to potential acquisitions in places like Brazil. But for us to do that, it's not a question of just making the numbers work. It's very important to us that we find the right cultural fit, because we believe the culture and the people who work in the Lockton environment are our most valuable assets.
"Being a private company, we have the luxury of looking toward the long term. It's very much about finding the right cultural fit. There are a number of key ingredients to that. One is very much associates who really believe and practice excellent client service. And second, I would say, it's very much about finding people who want to develop themselves and be better tomorrow than they are today."
Lockton also has used strategic alliances as a means of branching out. In April, it launched Lockton Global, a partnership of XX privately held insurance brokers and risk advisers. While Lockton has fully-owned offices in Mexico and Brazil, it partners with brokers in XX additional Latin American countries.
"We think it's the best of both worlds," James said. "Sometimes there are some very strong and established businesses in particular countries that have grown up there, that have established reputations there, companies that fit within the culture and the value system that we have at Lockton. And if you've got a good partner there that is able to look after your clients' needs there, why wouldn't you want to do business with them?" Marsh prefers acquiring local brokers, Brockmann said, because they bring a wealth of local knowledge.
"We've been able to retain the local teams in every single area we operate," he said. "I'd say we have almost XXX% locals. We have very few people who were sent here to work. Maybe some are sent on special assignment, but CEOs in all our operations are local. I think that's very, very important in Latin America.
"The business communities have grown a lot, but in a way they're still very small. So it's important to be close to all the business leaders, and that's easier to do if you are from the same country, of the same nationality."