Digitalization Key to Unlocking MarketSat, 09/01/2018 - 10:12
Q: What opportunities did the Mexican market offer to SeguroSimple.com, considering the low penetration of insurance particularly in the automotive sector?
A: We like to consider ourselves a Latin American company. Although we have both Mexican and Peruvian stockholders, our Mexican stockholders now surpass their Peruvian counterparts. The company started in Peru and is now the No. 1 digital insurance broker there, breaking even at the end of 2017.
After analyzing the state of the Mexican market, the company decided to enter the country and tackle the opportunity that low insurance penetration offered. The Mexican automotive market is 20 times larger than Peru’s, yet insurance penetration is at just over 30 percent. We think there is an enormous opportunity to develop our digital model and garner a bigger presence than traditional brokers.
In 2015, only 5 percent of all car insurance products were sold through digital platforms and by the end of 2018, the projection is for this number to grow to between 7 and 8 percent. Our expectation is that by 2022 or 2023, digital insurance penetration will reach a 15 to 20-percent rate out of the total car insurance sales and our goal at SeguroSimple.com is to cover 5 percent of the total vehicle insurance market in Mexico and Peru. Chile and Colombia will be our next target markets. Unlike what happens with cars, people do not need to see or feel their insurance before buying it, which means that just like what happened with airline tickets, insurance sales will eventually become fully digital.
Q: What advantages can you offer your insurance partners as a digital link to potential clients?
A: We can offer two advantages through our digital model. First, we can access a client population that might not have had previous contact with the insurance market. Second, we can sensitize vehicle users to the importance of insurance through the content we post as part of our marketing strategy. Digitalization has allowed us to reach a wider potential market and clients can quote their products and choose from different alternatives digitally. We ask for very basic information from the clients and their vehicles and based on a quick assessment, we can offer different options from the eight insurance companies that collaborate with SeguroSimple.com.
We understand that insurance products might be complicated at times, which is why we also have a contact center available by phone, email or WhatsApp. That way, whatever doubt may arise regarding coverage, payment or any other issue can be addressed by our support staff. People know they need insurance and they want the best deal available, but they sometimes do not know what they need to insure based on how they use the vehicle.
Q: Considering the close relation between financing and insurance, what is your plan to establish collaborations with dealership groups and financing partners?
A: At the moment, we are focused on insurance services for private users. We also have a limited offering for taxis and ride-hailing platform drivers. We chose not to enter the cargo segment because that requires more specialization and we did not want to get involved in a market where we could not offer an optimal service.
We still have not approached dealership groups directly but we have many clients that are part of the sales force at several dealerships. These users have found SeguroSimple.com a powerful and useful tool to support their clients by offering different options and potential savings in acquiring their insurance. We do have a plan to approach distribution groups formally and we already have this in place in Peru, but in Mexico it is a midterm strategy. In the long term, we also want to reach out to companies and offer them corporate insurance plans for their employees. Being backed by a company reduces the risk that insurers face with certain clients, and companies can offer this as an added benefit to their employees.