Growing Mexico’s Insurance Culture
STORY INLINE POST
Q: What does Assurant’s extended warranty policy offer dealerships and end-users?
A: Our service line offers extended services for the automotive industry. The extended warranty offers a unique value for both dealers and their final clients. Assurant has over 50 years of experience in the global auto sector and 17 years’ operating in Mexico. This service protects vehicles with all the knowledge from our team, competitive prices, and a first-rate customer service during the claims process. The service adds value to dealerships, highlights the quality of their vehicles, improves client satisfaction, and promotes loyalty to the brand.
When clients are buying a vehicle and suddenly the dealership starts talking about extra costs, it is understandable that they do not want to spend more money. However, that little extra could end up being a major benefit if the vehicle presents a transmission failure four years later. Car transmissions for medium-size vehicles can cost over MX$100,000 (US$5,000), making the MX$3,000 (US$150) investment on the extended warranty worthwhile.
Q: The industry has suffered from shortages that have reduced new vehicles sales and boosted second-hand vehicles sales. What has Assurant done to target that market?
A: Assurant works with over 1,500 dealers from 21 brands across the 32 states in Mexico. This penetration allowed us to innovate in our services and offer a Certified Pre-Owned Warranty (CPO), which operates as a multibrand warranty that helps dealerships with their pre-owned vehicles sales.
Extended warranty and CPO vehicles assuage clients who want to protect their investment and prevent unexpected expenses. These services boost sales and benefit dealerships and end users by facilitating the return of the vehicle to the workshop for maintenance and parts or the repurchase of CPO-qualifying vehicles.
Q: How has the pandemic affected the insurance culture in Mexico? What does Assurant do to promote its extended warranty services?
A: The pandemic increased people’s appreciation for and reliance on the goods they buy, leading them to consider greater protections but cost remains a problem. Everyone has to save to buy a car so it is important to understand how spending a little extra can protect their vehicles.
There is a cultural issue regarding insurance in Mexico. The entire insurance industry does not account for even 3 percent of Mexico’s GDP. It is an industry with minimal penetration. In other countries, insurance services represent between 7 and 10 percent of GDP. Industry players have significant work to do and training dealers regarding the benefits of insurance is key. Assurant trains salespeople and provides them with essential tools to explain the advantages of the extended warranty to end users. Our mission is to protect what matters most.
Q: Does Assurant offer any special service for electric and hybrid vehicles?
A: We introduced Assurant EV One℠, an extended warranty for electric vehicles in Latin America. With this, we become a pioneer and benchmark for the product. This service was already offered in other Assurant markets, such as the US and the UK, and was imported due to the growing demand for EVs in Latin America. Currently, Mexico is the EVs leading country selling almost 25,000 units in 2020 alone, followed by Brazil with almost 20,000 units. The annual variation of Argentina from 2019 to 2020 is almost 54 percent.
Q: How will Assurant implement telematics into its services?
A: We are about to launch a telematics smartphone application, which works with a device installed in the vehicle that syncs with the mobile app. The app allows users to manage the vehicle’s performance, including tires, fuel, factory warranty and extended warranty from their cellphone. Using telematics, our clients will be able to create geo-fences to drive safely within cities. The application can even be used to manage all the cars used by family members or fleets. This product is still in beta trials but has been highly successful among our collaborators and clients and will be part of the CPO program to strengthen Assurant’s offer for the automotive industry in Mexico.