Dominican Republic 2013 | FINANCE | VIP INTERVIEW

TBY talks to Luis Gutiérrez, Executive President of Mapfre BHD, on entering the country through a merger, growth areas, and the regulatory environment.

Since you were appointed in January 2012, how would you assess your first months in the position and what strategies are you seeking to implement?

The year started rather slowly due to the electoral process the country was going through. Nevertheless, the economy is very active and decisively expanding, and I personally believe that this will be a very positive year at all levels. We at Mapfre BHD are very pleased with the results of 1H2012, because we have grown in every field, including market share, premiums, and market penetration. The insurance market currently offers plenty of opportunities, and it will offer even more in the near future. In terms of the strategies I want to implement at Mapfre BHD, I would like to focus on training. We currently have 298 highly skilled and professional employees and it is vital to offer them the right tools to improve and sharpen their skills, so that when new opportunities come up, they are ready to take on the challenge. In this regard, we have already established our own training center, which has started offering courses to our employees.

How has the insurance market evolved in the Dominican Republic over the last few years?

The insurance market in this country has grown considerably in the last few years and continues to grow as we speak. The market is expected to rise by 12% in 2012, whereas estimates for the expansion of the national economy are at about 6%. The reason why we see this trend is because there are many niche markets where the sector can expand and expenditures per capita and the percentage of the insurance sector in terms of national GDP are still low. Therefore, there is a lot of room to grow. In the corporate sector there is an insurance culture already and today there is a price war. However, the SMEs segment will be a key market in the near future. Also, the life insurance segment is expected to show the fastest growth rates in this country.

“The level of insurance awareness will expand among middle-class Dominicans."

What market factors led to the establishment of Mapfre in the Dominican Republic?

The Dominican Republic has always been a strategic market in which Mapfre has aimed to expand its business activities. The beginning was tough, but after two years in the country we had the chance to establish a partnership with BHD Group, a key player in the insurance sector. This partner company has a broad knowledge of the sector and an excellent reputation among customers. Therefore, the merger with BHD Group was a beneficial step for both companies, because we contributed with new technology as well as international systems and standards. Back then, the growth potential that the sector offered over the medium to long term was the main market factor that encouraged us to set up operations in the country.

What is Mapfre's current market share and what are you aiming for over the next few years?

The Dominican Republic is a very competitive market with several strong players in the sector. We calculated the market share of the premiums collected by each company and in May 2012 Mapfre was the second biggest company in the market, with a 16.1% market share. Regarding our future aspirations, Mapfre always aims to lead the market, bearing in mind our customers and competitors. By leading the market, we mean being the leading company in terms of services, quality, and innovation.

Which areas would you consider the most advantageous for your business?

Today, the corporate segment of the market is the most important area, not only for Mapfre, but also for all companies involved in this sector. In this regard, we are very strong in the hospitality sector. In terms of future perspectives, I believe that the market has yet to fully develop in areas such as civil liabilities, life, and car insurance. Corporate business and property insurance are today's main products in the market.

How do you assess the current state and prospects of the insurance market in the Dominican Republic?

We still need to work on raising awareness among Dominican citizens. As long as the economy keeps growing, the level of insurance awareness will expand among middle-class Dominicans. At the same time, I think we need to adapt our services to their needs and status, as well as to come up with new marketing systems that will enable us to be closer to our customers. Nevertheless, there is still a long road ahead, especially concerning individual products and micro insurance.

Are online and low-cost products the future of the Dominican insurance market?

I would not go as far as to say that these two elements are the future of the market, because I believe the future is as wide as you want to see it. I think our first priority is to make insurance products accessible to a wide range of citizens, get closer to customers through different channels, and expand business activities in as many niche markets as possible. Insurance companies have to adapt their products and their systems to the customers.

What regulatory measures should be taken for the sector to improve further?

In my opinion, I would like to see greater transparency of data and more coordination. I am aware that the authorities are already working on a new insurance law that hopefully will support transparency and coordination. It is a much-needed change for our insurance sector.

What are the future targets of Mapfre BHD?

The Dominican market is highly concentrated; the top five companies in the sector own around 80% of the market, and the top three about 60%. Therefore, we aim to grow our product portfolio, our marketing channels, and expand our office network across the entire country, which currently stands at 11 offices.

What role does the Dominican Republic play in Mapfre's regional strategy?

There are 18 different countries in Mapfre America, and the Dominican Republic is somewhere in the middle; we are still a young company in a rather small market. However, the future perspectives are very bright and we are the second most important market in the Caribbean after Puerto Rico.

Is Mapfre BHD planning to launch any new products into the market in 2012?

We will launch new products for condominiums and microbusinesses, as well as upgrade our marketing channels as part of the innovation process.

© The Business Year - August 2012