INNOVATE TO WIN

Colombia 2020 | FINANCE | INTERVIEW

Zurich Colombia aims to offer increasingly innovative solutions in order to combat the low insurance penetration rate in Colombia.

Juan Carlos Realphe
BIOGRAPHY

Juan Carlos Realphe has more than 30 years of experience in the insurance industry. He is currently CEO at Zurich Colombia, a position he has held since October 2019. Prior to joining Zurich, he was General Manager for Lloyd's Colombia. He also held different leadership roles at Willis Colombia and VP for Mapfre General Insurance for around eight years, where he joined as head of property. He started his career at Colseguros Insurance in Allianz Group, where he had various roles.

Zurich has been in Colombia for five years. What is the strategic importance of the local market for its regional and global ambitions?
Colombia is positioned as the fourth-most competitive country in Latin America, according to the World Economic Forum, and the fourth largest economy by GDP in the region. The insurance industry in Colombia has grown on average 9% over the past 10 years and it won't be the exception for the next 10 years. Direct presence in Colombia is key for the region and for the group as part of our strategy to keep working in order to strength the Zurich footprint, bringing to the market our expertise, knowledge, and capabilities, helping people and economies to grow. At the same time, we want to consolidate Zurich as a leading insurance company in Latam, and Colombia is a fundamental market in achieving that.

At less than 3% of GDP, Colombia's insurance penetration remains low relative to other countries. What should be the strategy—for Zurich and for the insurance sector in general—to tackle this issue? What can be done to overcome the structural and cultural obstacles?
3% of GDP insurance penetration is low indeed. This is not just because of per-capita income, or culture, or lack of insurance knowledge. I do believe that the insurance industry in general must be able to deliver to clients, as well as brokers and agents, a different kind of experience that allows us to build trusting relationships, making our services easy to process, buy, and pay for. On the other side, we need to deliver innovation and become digital. The world has changed rapidly in terms of customers and needs and we must not just adapt, but re-design the way we interact and offer value to clients.

What is your strategy for increasing penetration, particularly for the SME and retail segments?
Nowadays, the SME and retail segments need tailormade and simple products that include coverage for emerging risks in areas such as cybersecurity. We also need to protect mobility for individuals instead of just assets or services like telemedicine. Innovation and facilitating processes are our main strategy for increasing penetration.

How is Zurich Colombia focused on bringing insurance innovation to the local market?
Innovation is the key factor that, without a doubt, will help address the low penetration problem in Colombia. For instance, we recently launched a motor product that protects the owner of the vehicle, not just the vehicle. Our focus is to protect individuals while they are commuting within the city by car, cycle, scooter, or public transport, as the conditions of “new" cities demand it because of car usage restrictions, pollution reduction interest, the reduced time spent in transit, and so on. But at the same time it is the very first end-to-end digital product in Colombia, which means that the customer or agent can get an insurance policy document using his or her tablet, laptop, or smartphone, including services like virtual vehicle inspection, virtual adjustment of minor damages, payment of claim at the place of accident, and more. Our aim is to facilitate the customer's life, enhancing the insurance experience and making ourselves closer to clients and agents. This is an example of how innovation can help us. But our strategy is comprehensive and this is why we also think about our corporate segment (CI Insurance). We must be able to offer services adapted to large companies and industries, offering risk engineering services through our digital tools, for instance, facilitating and structuring international programs, adapting products and coverages to new needs, or helping our clients on the reinsurance side when for different circumstances we cannot help on the insurance side. It is about how we can make ourselves closer, present, and tangible for our clients.

Zurich notably entered the Colombian market without first acquiring any local company, but you have since acquired QBE Seguros/ZLS Aseguradora de Colombia. What impact will this move have on your operations in Colombia?
The acquisition of QBE positively impacted the Zurich regional operation in terms of scale and talent and Colombia is not the exception; We have integrated local knowledge and experience that allowed us to increase our product offering in the market.

How do you see the COVID-19 pandemic affecting the Colombian insurance sector over the long term?
COVID-19 is going to affect the insurance sector globally. As the economic crisis caused by the coronavirus pandemic continues, insurers are acting more flexibly than other industries in dealing with the adverse effects, thanks to their long-term vision. The same can be said for Zurich Seguros, which has implemented different actions in order to protect employees, clients, and brokers. The world will never be the same again, nor the way of relating to each other, nor the way of doing business even. This is not just related to the economic impact of the pandemic; it is about how we can be prepared for similar situations affecting the whole world and how private and public sector can work together to look for truly resilient economies and communities.

What is your outlook for the remainder of 2020 and 2021?
As insurance sector performance is directly related to the country's economy performance, my expectation is for a difficult 2Q and a 2H20 boosted by economic recovery. For 2021 I do believe that we will be able to return to the path of growth based on innovation focused on the customer, simplifying our business and operations while maintaining a sustainable business model that reinforces us as a trusted brand for our customers and stakeholders. Our solid financial position can reassure our customers that we will be there when they need us to handle their claims, and our shareholders that we are financially stable. It also gives us a well-earned positive reputation as a business and employer and positions us to invest in future growth.