Brokers Betting on Ride-Hailing Vehicle InsuranceBy Alejandro Enríquez | Thu, 07/16/2020 - 12:52
Q: What are Interesse’s foundations?
RI: Interesse is a Mexican insurance broker focused on technology. We were the first broker to launch a mobile app for acquiring vehicle insurance. Through this experience, we learned a great deal about insurance through e-commerce. Mexico, at that moment, was not ready for such a product. We are a team of 130 people working under the principles of innovation, technological development and service excellence. To provide an excellent service you need to focus first on your product. In the insurance market you have two options: being the middleman for a product another company sells, or being the designer of a product that fits the needs of the customer. With this as our basis, we built a consultancy area that has developed strong business intelligence capabilities that allow us to detect patterns in thefts or accidents to develop in-house predictive models. In the automotive market, for instance, a 2,000-vehicle fleet has a strong correlation between current and future incidents happening to the same vehicle. Our statistical capabilities allow us to make smart decisions, including suggesting types of units, routes, schedules or building custom policies based on customers’ needs.
Another opportunity we see in the market is the lack of innovation and technological development in the leasing segment. We are focused on fleet management solutions, providing the best options for leased vehicles. We are not a middleman, we are consultants and strategic partners in insurance for vehicles, fleets and other assets. We are leaders in insured assets in the country, with a US$3 million insured portfolio. More than 50 percent of our customers are international companies that we have won through international tenders. In addition to our B2B model, our digital platform has allowed us to develop a B2B2C model.
CIO Magazine has recognized Interesse as one of the top innovative companies in the insurance and financial services sectors. We have also been recognized as the top financial institution among our competitors by Top Companies, Expansion Magazine. In a joint initiative between Deloitte, Tecnológico de Monterrey and CitiBanamex, more than 2,000 companies have participated to be part of the Mejores Empresas Mexicanas (MEM) and in 2019 only 104 companies were recognized as having the necessary, financial strategy, strong ethical principles and a solid vision.
Q: What role does the automotive sector play within Interesse’s portfolio?
RI: The industry represents around 30 percent of our portfolio but it is the business line that has seen the biggest growth rate. Our daily operations have been reduced due to the pandemic but we have hundreds of thousands of cars that are insured. At Interesse, we believe that over the next five years there will be fewer people actually buying a car while mobility through ride-hailing applications will increase, which will bring new trends in insurance. Interesse is among the few players in the Latin American region that offers solutions for insuring ride-hailing vehicles.
Q: How do you tackle insecurity concerns in the country?
JC: Insecurity is an unfortunate circumstance in Mexico. Organized crime has always been present in different segments. The luxury auto segment and taxis are commonly affected but today’s trend is to attack compact or sub-compact models used in ride-hailing applications. Heavy vehicles are also targets of robberies, as well as trains, which is why we have suggested that customers avoid certain zones and schedules when shipping their products. Through our business intelligence unit, we have showed our customers the most critical routes, the hours in which more incidents occur, as well as the best pick-up and delivery times. Through our recommendations, our customers have seen a decrease in the number of incidents. We even suggest which vehicles, despite their competitive prices, should not be used due to the high number of robberies for that model. We have a ranking of the most-stolen models, including details such as color or type of transmission that can influence their appeal to thieves. For instance, automatic transmission vehicles are less attractive due to their high maintenance costs.
RI: The suggestions we provide are not common in our sector. Most of our competitors focus just on providing insurance for the fleet and conducting the procedures needed with the insurance company. At Interesse, we feel like we are part of our customers’ risk management area and we work alongside them to make strategic decisions. At the end of the day, what they want is for their vehicles to be on the road. All of our solutions are based on that. For instance, workshops commonly take up to two months to get a required spare part. Our job is to acquire it faster and fix the unit as quickly as possible. Our expertise in finding alternatives allows us to do that. Interesse’s systems are intertwined so that all information flows smoothly to provide the best solution to our customers.
Q: What are the opportunities for Interesse in the fleet-management market?
JC: Corporate fleets make up our largest segment. Risk managers are aware of the need for civil liability insurance due to the routes they follow. Given the number of corporate customers we have due to our specialization, COVID-19 has had little impact on Interesse. Most of our customers have, in fact, renovated their fleets. Food industry companies often manage more than 15,000 units and we offer specialized coverage schemes for such companies. In the corporate world, 100 percent of units have insurance.
RI: Vehicles are also insured as a part of the leasing scheme. The specific insurance policy can change from fleet to fleet as not all vehicles are subject to the same risks, but all of them should have civil liability insurance. We also oversee the legal aspect of fleet insurance. Depending on whether the unit meets certain conditions, the coverage level can vary between ride-hailing and transportation vehicles. There can be two fleets with the same number of units and models, using similar routes but their policy prices will be different depending on the time of day when they use their units, for example.
Q: What are the keys behind Interesse’s success in the ride-hailing segment?
JC: We did a lot of research in China, the US and Brazil. In other countries, ride-hailing platforms started as someone going from point A to point B who used the platform for additional income. In Mexico, ride-hailing platforms are totally different. When these platforms arrived to Mexico six years ago, many taxi drivers migrated to them. At the same time, many private drivers who already understood the standards of the segment used the platforms. This is how insurance companies understood the service, considering a private vehicle used as a taxi and charging for a policy that would usually double the cost of a regular insurance product. In practical terms, most insurance companies canceled policies for most platforms. Now that we have created solutions for this segment, different platforms and insurance companies have approached us to understand our model.
We analyzed each request separately to identify the client’s needs. We went directly to insurance companies, explaining the opportunity to insure hundreds of thousands of vehicles. Mobility is changing and the vehicle park in this segment increases daily. New generations are not interested in all the headaches that come from owning a car. They prefer ride-hailing applications, which is also affecting new vehicle sales. Now, some companies will purchase around 100 compact or subcompact vehicles and sign a five-year contract to use them on ride-hailing apps. COVID-19 accelerated this phenomenon. Companies are now questioning whether it is necessary to actually own vehicles for executive positions when they can institute a ride-hailing service scheme. Interesse has understood that model very well and has implemented solutions successfully throughout the country.
RI: Paradigm shifts in mobility and alternative modes of transportation like electric scooters, carpooling or vans require us to create products that did not exist before. Brokers should play an active role in the development of processes and cost savings. The model where a broker was just in charge of paying customers in case of an incident is over. In the ride-hailing model, by the time someone reports an incident, we already have the details on time, location, passenger, unit and route, among other elements. This also helps us to avoid fraudulent payouts. Once all the fraudulent claims are removed, insuring ride-hailing platforms is not a bad business at all. Market sophistication comes from available online data.
Q: What allows Interesse to remain flexible and to adapt to new business models?
RI: First, our principle is to provide solutions rather than sell insurance policies. We have invested for several years in technology development. Most of our solutions are in-house. In addition, we have developed a strong capacity for statistics. Our partners’ background in other insurance companies allows us to structure our technical and legal elements correctly. This model has proven to be successful. Although there is little innovation in the insurance market, there are players that actually listen. Truth be told, not every solution is successful but for over five years, we have delivered a sustained 20 percent annual growth rate in insurance policies. Our annual growth rate in May, despite the pandemic, remains at 20 percent. We are projecting similar results for the year.
JC: I have participated in the insurance market for over 20 years, and the most important aspects are credibility and good reputation. When we approach insurance companies to offer a new solution or to create an innovative product after listening closely to our customers’ needs, they trust us. Insurance companies believe in our bets. Often, companies simply focus on sales, leaving many business opportunities behind. This is why the role of the broker is really important: to find solutions, because our customers are willing to pay for what they actually need.
Q: What opportunities do you see in the automotive sector?
JC: We are really optimistic in this regard. We have solid capacities to continue growing in the segment. Interesse continues to innovate. Our most important asset is our team of collaborators who are committed to our mission, surprising our customers with new solutions. The opportunity we see is to continue to support our customers’ fleets, being flexible in the number of units of investment (UDI) we are willing to cover. Ride-hailing insurance remains a great opportunity, as well. Specific to ride-hailing, some companies have already approached us to minimize their costs. This is the business line that has grown the most over the last three years.
In addition, our integrated platform allows our customers to have a state-of-the-art fleet management system. We have an online ecosystem that is connected with different insurance companies to provide online services related to pricing and payments for our customers. This makes life easier for corporate risk managers when managing key accounts or key policies in the way they prefer. Our system gives them that flexibility and transparency. The application also has GPS features so the location is sent immediately when an incident occurs.
RI: For B2B2C, our platform is multicompany and multiproduct. If a company’s employee has a life-insurance policy with one company and vehicle insurance with another, both can be integrated in the same application. Moreover, we are developing financial options to track savings and financial yields in the same ecosystem. This is what makes us innovative and unique in the market.
Interesse is a Mexican insurance broker with operations in North and Latin America. The company has been recognized by Expansion, Mejores Empresas Mexicanas (MEM) and CIO as one of the top innovative financial services companies in Mexico