Patria Compañía de Seguros, S. A. was founded on July 26th, 1971. How did the concept arise and how has the company evolved since its foundation?
The company was founded by my father, also named Rafael Bolívar Nolasco. Back then, he worked for another insurance company as the regional manager in Santiago, but saw that this company could have operated a lot more efficiently. As a result, he began looking for people to work on his personal project, his dream, and within two years found an investor in Dr. Miguel Ángel Luna Morales. The company had its ups and downs, as start-ups usually have, but at around the year 1989, Dr. Morales passed away, and the company struggled. For this reason, my father had to acquire the company in its entirety. Those were some challenging years for my father, trying to keep the company afloat amongst a lot of turmoil. Since its foundation, the company started working in the vehicle insurance niche, where it has positioned itself. My father always believed in a company oriented toward helping his family and in a family-run model. All of my four siblings have been or are still active in this business, the eldest of my brothers passed away on July 2000 while holding the position of Vice-President of the company, and that is when my father asked me to come and join him.
What is the composition of your portfolio and what sort of clientele are you targeting?
When I joined the company I saw that we had a strategic weakness in being a one-product company. I suggested to my father, who was the company president at that time, that we should diversify so we wouldn't end up in a bad position in terms of our company image. A few years later, I managed to convince him because due to considerable foreign investment in the country at the time, including such firms as Mapfre and Seguros Constitucion, the market began to change, which created new challenges for us to try and remain competitive. To be able to thrive in the new commercial climate required us to change the company image, broaden our offer, and implement changes in the infrastructure and in our computer systems.
I was appointed President in December 2005, but back then, our main office in Santo Domingo was located in a building on the 4th floor , with no parking space and no elevator. We managed to move the office to a much more adequate place where we had access to our clients in Santo Domingo, and we also transformed our image. We looked for reinsurance companies that could provide us with the support we needed. Currently, our main business is still car insurance, but within this area we have many subcategories. Auto liability insurance is about 80% or 85% of our business, and then there is full auto coverage, which is the segment that could represent the most growth in the company, but it is also the segment that could represent the most claims because of the lack of traffic education and traffic law enforcement in the Dominican Republic. There is another subcategory, which is cargo insurance, and we have grown considerably in this area. We did not have that category six years ago, but we now insure trucks for liability, as well as the container and the cargo. That has been one of our key growth segments. There is also liability insurance, which we do not usually offer as a single product, and instead if someone wants liability insurance for their business, we will also offer property, theft alongside other coverages as well. Currently, financial institutions are requesting unemployment insurance, which is not a product we have considered providing, although depending on circumstances we might enter this area in 2015.
In terms of channels and of sales distribution, there are many opportunities for new sales channels for microinsurance policies. We are analyzing the possibility of offering products in new channels the following year.
Despite being vulnerable to natural disasters, a significant proportion of the population lacks insurance. What initiatives should be taken to raise awareness and increase up-take?
It has to start with the government insuring infrastructure. We experience heavy rains, and flooding is frequent, making this an urgent area of attention. Importantly, incentives need to be put forward to encourage the use of insurance, not only in terms of property, but also with life insurance. We probably are one of the only countries in the world to levy a tax on life insurance, which really does not help. People need to be educated about insuring their life, as well as their cars, their homes and their businesses. It is just as well that the country has been rather lucky that since 1998 it has not seen a hurricane affect it in the way that Hurricane Georges did.