Innovation and agility are key for the revival of the insurance industry

At the AMIS (Asociación Mexicana de Instituciones de Seguros — Mexican association of insurance companies) digital meeting, Jesús Martínez, CEO of MAPFRE MEXICO and LATAM North, and Vice President of AMIS, led the panel discussing international perspectives on the challenges and opportunities created by COVID-19 for the insurance industry and Manuel Aguilera, General Manager of MAPFRE Economics, led the panel on regulation, where leading figures from the industry presented their views on the challenges that the new normal will bring.

 Keith Buckley, Global Head of Insurance Ratings at Fitch Ratings, Neal Baumann, Global Insurance Leader at Deloitte, Duncan Briggs, Managing Director at Willis Towers Watson, and Fernando Mosqueda, Director of Milliman in Latin America, participated in the panel on international perspectives. It discussed the response of both the insurance industry and regulators to the pandemic, as well as the impacts expected on the road to recovery.

The panelists agreed that the industry has remained resilient and solid, adapting to the situation in a quick and timely manner by modifying its technical operations, offering measures to help its clients and working on new products that are adapted to current realities and what the future holds.

While the industry’s performance has been adequate, the impact of the health crisis is undeniable. A 4.4 percent reduction in global GDP is expected for 2021, rising to 10.8 percent for Mexico in particular. This will be a major blow for all industries, including insurers. Given this decline, demand will also fall, creating pressure in terms of volumes and profits.

But panelists saw this scenario as a great opportunity for technological acceleration in insurance companies. In addition to adjustments and modifications to existing products, new products must be created to meet the current needs of the market and specific clients.

Innovation will now be the key to recovery, through agile, simplified and transparent models that provide straightforward, customized solutions for clients in the post-COVID era thanks to digitized tools such as data analysis and artificial intelligence.

Ricardo Ochoa, President of the CNSF (Comisión Nacional de Seguros y Fianzas — Mexican national insurance and finances commission), Óscar Rosado, President of CONDUSEF (Comisión Nacional para la Protección y Defensa de los Usuarios de Servicios Financieros — the Mexican national commission for the protection and defense of financial services users), and Tomás Soley, Superintendent of Insurance in Costa Rica, participated in the panel on regulation, led by Manuel Aguilera. The panel discussed the measures implemented to ensure care for insured parties during the uncertain times caused by the pandemic.

Among several notable topics, panelists commented on how the pandemic is helping to raise public awareness of the importance of insurance from a behavioral economics perspective, as well

as helping the industry—and everyone in general—to take a giant step forward in digitization. They concluded that this, in turn, will become an extremely important tool for increasing insurance penetration in our economies.

Finally, the panelists agreed that one of the specific lessons gleaned from this pandemic is that when major problems arise in the financial and insurance systems, the collaboration of companies, intermediaries and authorities is essential to be able to move forward.

Manuel Aguilera concluded by saying that “in Mexico, we have seen the necessary understanding and coordination among insurance stakeholders to make things work, ensure that things continue to work and, above all, help society face such a complex situation.”

This outlook means that the insurance industry has all the tools to overcome the obstacles in its path. By taking advantage of the awareness that the pandemic has instilled in potential clients, and focusing strategies on them, this pothole can become a springboard for restoring growth in the medium-term to levels seen before the crisis.