How would you characterize the role of Secrex in trade and credit insurance in Peru?
We are an affiliate of the Spanish state-owned company CESCE, which historically served as the Export-Import Bank of Spain, but which has since become more of a credit insurance company. We have guarantees in construction and public works for our customers and clients who deal with government and companies in the public sector in segments such as mining, construction, and transportation.
What is the importance of Peru in comparison to neighboring markets?
Peru is one of our most interesting markets where we play a competitive role. The share of incomes of CESCE Latin America comes from Peru where, after the banks themselves, we are the leading company for bond trading. Peru is important for us and we are performing well predominantly offering bond services.
Why is the market for this so underdeveloped right now?
Credit insurance was seen only as an instrument for export, and was not taken into consideration at the beginning because the first thing that governments wanted was to develop export and trade. Ultimately it has become an instrument for covering domestic sales in which credit is involved. There is a risk of non-payment, and we are seeing that it is being used for internal and domestic cases, but only between companies and end-users. We must be able to analyze and access information on companies to include balance sheets and figures. It is quite complicated in these countries and it rather difficult to obtain a frank picture of what an individual does or does not have.
What do you see as the biggest potential source of growth for credit insurance in Peru?
The French and Germans are prominent players in credit insurance. In this part of the world we are one of the big players. We are the second or third group in Latin America to engage in this segment, but other countries are also interested and are doing well. Developing credit insurance is our biggest goal for the future.
Do you see potential for bonds to become a larger part of your business?
There has been a boom in public works, which is helping to develop this area. It is important to say that the public offerings have been scarce in the first part of the year because of the change in administration and the overlap of new officers. They have been unable to draft the budget in a timely fashion. Bonds are mainly used for guaranteeing the feasibility of a contract, so people can place a bond to guarantee that this work will be finished in time and successfully. We organize and assess their expertise and growth potential. We then go ahead and write down these risks and place the bond. Our loss ratio is quite good in these areas, at about 30%, which is manageable considering these markets.
What steps are you taking to refocus the business on these areas?
We want to become more competitive with our closest customers, those we consider our core and portfolio customers. We have decided to be competitive in the way we work on this. We are growing very fast in the fields of technology, databases, and sharing among the companies in the group. We are setting up decision-making offices in broader Latin America, which are important in that we are geared at being local and global at the same time. The only way to do this is to have a regional office for different purposes in several countries where we have the most know-how.
What is your vision for the company's growth in Peru over the short term?
We have developed staff teams and technological tools that work effectively. These are not yet normalized because we are just starting the network. We are earning and are well placed in the market share and profitability rankings. We will try to enlarge the share of the company in the insurance market in step with the pace of overall market growth. It is still a small market, but we will try to grow it and take whatever market share we can in the bond industry, as we want to be seen as the main player and leader, improving services and accountability.