Complex Risk Assesment for the Corporate WorldWed, 05/08/2019 - 17:09
Q: Lockton México specializes in insurance but its operations have an impact on many other sectors. What is the full range of services Lockton México offers?
A: We are more than insurance brokers. When we first started, we only provided consultancy in the area of pensions but given our technical, mathematical and actuarial experience, we opened new lines of business. Today, we also provide consulting for projects that require mathematical models with a certain degree of specialization.
We also started to participate in the employee benefits area. Our work in this area involves managing benefits and compensation programs. We are pioneers in what we call flexible benefits; this means that through a platform, collaborators of a company can visualize their compensation and select the benefits they want within a regulatory framework, taking into account their situation or particular needs. One of the most common benefits for employees is medical insurances. In this area, we operate as insurance brokers and look for the best costs and benefits for our clients. Lockton México also has a risk division. Through this department we help companies determine the risks they may face and, through different actuarial and mathematical models, we define the probability of each risk and the estimated damage. We also tell clients how to mitigate or reduce risk and suggest alternatives.
Q: Given Lockton México’s experience with pensions and retirement plans, what is your view regarding the regulations for private pensions?
A: We believe some changes are required. We have been working on this for many years and we have been pushing for change. We work with companies to help them raise awareness among their employees about the importance of having a retirement plan and a savings culture. Mexico is a country with low levels of savings for pensions. If we do not make a change and create awareness, the country will face a very difficult situation in a few years.
Q: How have Mexican companies adapted to risk mitigation?
A: More and more companies are instituting risk committees that play an important role in raising awareness among managers and administrative boards about the importance of mapping risks. Many companies have created these special committees to address significant risks, be it financial or cybernetic, but there are still some risks to which companies do not attach the appropriate importance. We continue to see low awareness of risk in small and mediumsized companies, which, in many cases, simply ask an insurance company to generate a budget on how much it would cost to ensure a certain situation. Companies do not analyze if the insurance coverage is adequate or if the wording of the policy is adequate to guarantee that it can be applied with ease. We are also seeing that this type of insurance decision is mainly based on price rather than on an in-depth analysis of the situation and risk management.
Q: What is Lockton México doing to raise awareness about the importance of insurance products?
A: Communication and education are two important areas for us. Once we have a client, we work to find educational schemes for their employees and generate processes to ensure that all areas involved are aware of the company’s situation. We also participate in forums organized by IMEF, AMEDIRH and the American Chamber of Commerce, among other associations.
Q: Your services are offered in different segments. Is there a sector or segment where you have identified reticence from companies?
A: There is still reticence from certain companies that say they do not need to create a retirement plan for their employees and there are certain companies that are under regulatory guidelines that prevent them from doing so. There are still many companies that are only looking for the most economical option. However, most companies, once they understand the problem and develop a plan, become convinced of the benefits of doing so.