Ensuring Client Assurance About Benefits of Motor InsuranceTue, 09/01/2015 - 15:44
Q: What is the secret behind AXA’s penetration level in the Mexican insurance market as a relative newcomer?
A: Eight years ago, AXA was completely unknown in the Mexican market as a brand. The best indicator of our success here is the increase in clients, and although the margins are still low, they improved by 2-3% over the past years. AXA’s philosophy is that we can better absorb risk by diversifying our portfolio. Since 1991, AXA has had significant life insurance presence in the US, but had no presence in Latin America whatsoever. Over the past few years, Mexico has become the company’s most important market in the continent due to the huge success we have had here, and the country enabled us to take the first step toward becoming a multi-specialist company. Motor insurance is one of the strongest pillars for AXA Mexico; it was the first business line for the company and quickly positioned us as one of the most important players in the motor insurance industry. If we want to continue our success in Mexico then motor insurance has to continue its rise to popularity, which is not an easy task in a country where only one in four vehicles is insured. Even so, there is higher sensitivity toward insurance when living in a bigger city, as shown by the insurance penetration in Mexico City, which, according to AMIS, is somewhere around 52%, whereas this number is only 26-27% across the whole of Mexico.
Q: AXA offers a wide portfolio of solutions in the automotive segment, but which of these have been the most popular in the Mexican market?
A: There are two in particular that come to mind. The first is the Pago en Sitio modality, which enables our policy holders to get paid at the site of the accident, and has proven to be an extremely successful tool in creating a stronger bond with our clients in Mexico. The second is El Protector del Asegurado AXA, which enables the client to request an external agent to review the case in order to decide whether their claim is valid or not. El Protector del Asegurado AXA is committed to reaching a well-based, comprehensive and essentially fair settlement, meaning that whatever this person’s first assessment is, AXA has to comply with the decision in terms of compensation. This scheme is highly efficient and has helped us to handle approximately 600,000 motor claims annually.
Policy coverage for used vehicles is also extremely important, regardless of the market. The insurance penetration for older vehicles is much lower, which is an issue that we must tackle, but in the end it comes down to the importance level that owners place on protecting their assets from a value standpoint.
Q: According to current regulations, every owner needs to have civil responsibility insurance for federal highway transit. How effective has this program been?
A: Any regulation that helps raise public awareness of the risks of driving is a step in the right direction, and we expect this regulation to extend to all cars in the near future. Although the overall compulsory liability coverage is something that is currently active in some states, it is something that is yet to be enforced unilaterally. I believe that, given time, the market will open up to this program by itself. We have partnered with a few corporations that are sensitive to this matter. Speaking from a client perspective, the road accident victim rate amounts to 17,000 deaths per year, so we are pleased about the protection that this initiative provides to the client. Additionally, we are actively participating with the Reacciona por la Vida association, whose role is not only to defend victims that were not protected, but also to create links with the appropriate authorities in order to better communicate with the public on this topic.
Q: What strategies is AXA implementing to expand its market presence, and what are your expectations for 2015?
A: The AXA Group is definitely keen on expanding in Latin America, already showing our willingness to do so by expanding into Colombia and Brazil. That being said, AXA will maintain its main Latin American focus on the Mexican market while evaluating further opportunities. In a scenario where three out of four cars are not insured, coupled with all the support that the government is providing for this compensatory interest, the growth expectation could be extremely different based on various factors, so understanding exactly how the insurance market will grow is far from easy. Even so, we remain confident at AXA and we look forward to being part of Mexico’s future in insurance