UNDERWRITING GROWTH

Ecuador 2014 | FINANCE | INTERVIEW

TBY talks to Juan Ribas Domenech, Chairman Seguros Sucre and Seguros Rocafuerte, on the state of the country's insurance industry, increasing insurance penetration, and plans for the future.

Juan Ribas Domenech
BIOGRAPHY
Juan Ribas Domenech graduated from the University of Denver with a degree in Economics and started out his professional career at Banco Del Pacifico, as a Corporate Investment Officer. He went on to serve as the Commercial Director for Techniseguros, Regional Deputy for Seguros Equinoccial, Branch Manager and later General Manager for Seguros Unidos, and then as General Manager for Cia. de Seguros Ecuatoriano Suiza, before assuming his current position as Chairman of Seguros Sucre and Seguros Rocafuerte in 2013.

What role do Seguros Sucre and Seguros Rocafuerte play in Ecuador's insurance sector?

Today, there are two state-owned insurance companies in the industry, Seguros Sucre and Seguros Rocafuerte, and we both currently work to ensure that the entire public sector is insured. Both companies are led by two highly experienced professionals, who have both worked in the insurance sector for over 25 years. These are two key elements for both the sector and the state. All in all, it is important for the government to have a state-owned insurance company in order to protect its vast public structure and insure its properties.

How would you characterize the insurance market in Ecuador?

Today, the sector is gaining relevance, experiencing the growth and expansion we all expect. However, Ecuadoreans are not yet fully culturally aware of the importance of insurance coverage. This is something we all need to work on in the industry. At the moment, there are around 40 insurance companies operating in Ecuador, and they will all need to fulfill the requirements of being stronger in terms of capital adequacy and equity, as stipulated by the government.

What is required to increase the social penetration of insurance products?

We need high levels of innovation and hard work with products for the mass consumer segment. Also, insurance companies must be creative enough to develop new products and strategies to target alternative market niches. Ecuador lags behind in terms of premium level and share of GDP, or in other words, the penetration of the insurance sector in society, as compared to other regional countries like Colombia, Chile, and Costa Rica is lower. This difference is mainly related to the way each country has developed its insurance industry—Ecuador has definitely not developed its insurance sector as far as the aforementioned countries.

Looking forward, what are the greatest challenges facing Ecuador's insurance industry?

We have to be able to increase our penetration, culturally educate people in the importance of insurance products, and also increase our share and role in the national economy. I think the greatest challenge by far is to increase the share of the insurance sector in GDP. However, let me say that over the past few years we have received more foreign investment in the sector—today, numerous multinationals operate in the industry, and I believe we are in the process in which local players must become more competitive to survive and as the level of professionalism increases, so too does the awareness among people of the need for insurance.

What is the balance between public and private companies in your client portfolio?

Around 80% to 85% of our client portfolio is composed of public entities. In this context, one of our main challenges is to become more competitive and transparent in order to better target the private sector in the near future.

What are your goals looking ahead?

Seguros Sucre is the leading insurance company in Ecuador, whereas Seguros Rocafuerte is among the top 10. Our goal is to consolidate the operations of both companies in order to increase our solidity and reliability, which will enable us to increase our share of the market. Also, we need to increase the number of services offered to our clients. These two elements will enable us to become a more relevant player in the private sector. If we want to increase our reliability in consumer perception, we must become a more transparent company. In this context, we have already taken important steps toward achieving this; we have traveled abroad with our largest clients when negotiating their reinsurance contracts, so they can be part of the entire process, knowing exactly where we stand at each particular moment.