The insurance sector in Mexico grew five times more than the GDP. Why is this the case here?
This is possible, firstly, because Mexico is a young country, and thus, the need for insurance is still in its early stages. Mexico's average age is 28.6 years, and young people do not have a need for insurance; however, the need for it will grow rapidly in the coming years. We will see the insurance sector growing by double digits for the next 20 years only because the average age in Mexico will increase over the next two decades. The second reason is that Mexico's culture has not been focused on being insured, though natural disasters such as earthquakes and hurricanes have raised awareness on why insurance is necessary
How do you compare market education of insurance in Mexico and other countries in the region?
It is lower; Chile is the most advanced country in Latin America insurance wise. It has mandatory insurance and pensions, and there is complete awareness of why insurance is necessary. For example, in Mexico, car insurance was not mandatory in any state up until three years ago, and now it is mandatory in only half of the states. It is slowly moving in the right direction, and the authorities are now more aware of claims and transferring the risks to insurance companies. There was a change, and they have started being more open to changing the laws in the first state, which was Mexico City. These states need to make sure it is being enforced. The other states will move when they start to see the benefits in those states that have made insurance mandatory and enforced it
What is your strategy to offer coverage against emerging risks such as cyber threats?
We are the first company in Mexico to offer a comprehensive insurance for cyber risk. We wanted to have the best policy available and established a joint venture with a more renowned, London-based cyber insurance company. Through the partnership, we can offer an advanced product that did not exist in Mexico; our product is called CyberSafe GNP. We are pleased to be the leaders and pioneers in Mexico in cyber insurance. Currently, this is only focused on corporations; however, at some point in the future we will have to go into the individual sector. This is the next step and we are going to develop that policy over the next 24 months or so
What is your priority in terms of innovative technology and how do you see disruption in the sector through insuretech start-ups?
There are digital insurance companies that could change the insurance sector in Mexico. We have to move fast and are trying to become a digital insurance company as quickly as possible with digital products such as “pay-as-you-drive" or “pay-how-you-drive" car insurance. There is a digital wave on how we will service policyholders in the near future. We will turn into a digital service company wherein all transactions will be available digitally in the next 12-18 months. About 35% of all automobile policies are now sold digitally. In the case of accident and health insurances, they are captured directly by the agent. One of the things that we discussed with the board is having an innovation cell outside GNP, and today we have an innovation cell in Santa Fe. It is part of the company, though it does not operate like GNP. We have a budget that allows us to buy any small insuretech company that can be of use for us, such as this cell in Santa Fe. It is difficult because we are a 116-year-old company, and we are trying to make the company more agile with a focus on innovation.