In the Beginning

Compañí­a Internacional de Seguros is the oldest insurance company in Central America. What role has the company played in shaping the sector?

We’re very proud to be the oldest insurance company in Panama. It was founded by the same people who fought for the separation of Panama from Colombia. Therefore, the founders of the company were the founding fathers of our nation and members of Panama’s first cabinet. Thus, our history is intertwined with the history of the country itself. We were the only insurance company in operation when the Panama Canal was being built, and for more than a century we have had an intimate relationship with the country and its economy, having survived two world wars, an economic depression, and the burning down of the city of Colon, after which, being the only insurance company, we paid for most of the damage on private property so as to enable businessmen to resume operations. So we’re proud to say that we’re not only the oldest company in Panama, but also the most quintessentially Panamanian company. To this day we have been completely independent and have never been part of any global enterprise. Our stockholders are now the third generation of the company founders. We truly believe in Panama and in our economy, and feel a strong sense of pride in being a Panamanian company providing services to Panamanian businessmen. The company name does include the word “international,” which may seem ironic, but the founding fathers had the vision back in 1910 that the company would ultimately unite and serve not just Panamanians, but people from the US, the Caribbean islands, and Africa. Most people in Panama at that time were Colombians. So originally, this insurance company would undertake business that wouldn’t be limited to Panama, but would also be connected to the wider world. Up to this day we’ve only had operations in Panama. We have realized business beyond Panama as well, but in the capacity as partners of other insurance companies in Central America, Ecuador, and Argentina.

The company provides a wide range of services in both its personal and business lines. What are your most in-demand products and how has your portfolio evolved over the last decade?

We cover property, casualty, bonding, auto, life, and health. We believe in every line of business, and that’s why we rank among the top four in every line of business in Panama among 33 companies. We view each line as a profit center, and believe that each plays its own role in the economy. We therefore make sure that every line of business has what it takes to be aggressive in the market, while at the same time being profitable. The largest line of business in Panama has traditionally been auto, which is the case for us, too. However, our health portfolio has, over the past eight years, gone from being our fourth line of business to the second biggest as of last year, just behind auto. We also decided to join forces with Blue Cross and Blue Shield, which is an umbrella association of independent insurance companies, and created what is called the Blue Cross and Blue Shield of Panama. All our health products are now marketed under the name of Blue Cross and Blue Shield of Panama. This has given us great public acceptance, not only because Internacional de Seguros is behind it, but also because Internacional de Seguros Blue Cross and Blue Shield cardholders can enter any of the million health service providers in the US and be treated as a local patient, be it in a hospital, clinic, or at a doctor’s surgery. So wherever you are in the US, the local Blue Cross and Blue Shield take care of everything, after which we reimburse the local Blue Cross and Blue Shield. Panama is a country with a very close relationship with the US, and many Panamanians travel there regularly.

How important are reinsurance services for your business activities?

This is a vital part of our business. We’re continuously taking risk from all our insurers. So in order for us to survive in the long term, especially where natural disasters are concerned, we cannot retain all the risk. In the event of a massive earthquake or flood, for example, the cost would be prohibitive. Therefore, property insurance companies opt for reinsurance when it comes to catastrophic losses. Our company is big enough to retain our normal day-to-day coverage without the need for reinsurance. We have a $140 million capital base that provides us with enough financial strength to cover our losses. Yet large losses as a result of natural disasters require reinsurance. That’s what gives us the stability to be able to survive as a business and take on massive claims, as we had to in Colon in 2013.

How would you describe your financial performance in 2013, and what are your expectations for next year?

Our performance in 2013 was extraordinary, as we broke records not only in sales, but also in profits. We were the first and only company in Central America to write over $200 million worth of direct premiums, and we’ve been the number one in the Panamanian insurance sector for the past five years, excepting 2013.

Last year your company received an A rating from AM Best. What significance does this have for you?

We’re very proud indeed, as AM Best exclusively covers the insurance sector, rating, and classifying companies according to international standards. Other ratings agencies merely compare you to your national peers. The A rating is the highest ever given to a Latin American company, and while a few others also have it, no other Latin American company has received a rating above A, namely A+. We received this rating for our financial strength and consistently strong results over the years.

You have been at the helm of the company since 2005. What have been your most memorable achievements over the past decade?

We went from being the third largest insurance company in the market to becoming the market leaders. That is the main accomplishment and speaks for itself. That being said, we owe much of that to our excellent team of brokers. Over 95% of sales in Panama are done through brokers. We provide them with all the tools they need, investing much time, effort, and technology, and providing them with the greatest accessibility of any company, with 24/7 web, and increasingly, smartphone access.

Internacional de Seguros is strongly committed to the development of the communities in which it is present, as in Los Pueblos. How important is corporate social responsibility for your company?

Being a local company with a history so intertwined with that of Panama, nobody values this as much as we do. Each of our branches has the freedom to undertake work and support initiatives that they feel the community requires. Los Pueblos, in the eastern part of the city, is a good example, where we stage Christmas activities for the disadvantaged. Our branch in Chorrera has also adopted a school, which we visit every year. Last year we rebuilt the canteen, and the previous year we provided their kitchen, raising the roof to provide greater ventilation. Year after year we undertake different activities depending on the needs of the school and the local community. We have also sponsored the rebuilding of historic quarters in Panama, including the reconstruction of two historical buildings, one a fully functional house that was burned down by the pirate Henry Morgan, and the other a building that will become an interactive museum. So for us, social responsibility is the reason we’re here. Our responsibility is not only to our stockholders, but also to the community, the country, those who pay the premiums, pay our salaries, and make us a success story.

© The Business Year – June 2014