Insurance, Surety Bonds Provide Growth OpportunitiesWed, 05/08/2019 - 17:12
Q: How has the change in presidential administration impacted Murguía’s business operations?
A: Given that Murguía participated in important infrastructure projects with the previous presidential administration, such as NAIM, the impact has been rather significant. We managed the surety bonds and the civil liability insurance for NAIM’s terminal building and runway number three, so we suffered a significant blow with its cancellation. We now are in the process of analyzing what will happen, whether the guarantees will be claimed and what will happen with the civil liability insurance. Leaving aside the impact on our business, the decision to cancel NAIM was political in nature, which we believe was not appropriate for the country or for the creation of an international trade, logistics and tourism hub.
Despite NAIM’s cancellation, Murguía continues to participate in governmental infrastructure projects like the Toluca Train. We are analyzing the possibility of participating in the Mayan Train and in other infrastructure projects the government has announced. If President López Obrador encourages the construction of infrastructure and housing the way he did when he governed Mexico City, the sector will grow and for us this will represent an important opportunity.
Q: How does Murguía’s portfolio reflect the existing opportunities of the insurance sector in the Mexican market?
A: Our product portfolio is extremely diversified. We offer benefits and insurance policies for corporate employees, auto, civil liability, construction all risk, and we are also present in the renewable energy and oil and gas sectors. However, we are also diversifying our offering and are managing other insurance solutions, such as for soccer teams or universities. The truth is that we manage all types of insurance.
Another element that has helped our diversification strategy is the geographic dispersion of our offices. Although most of our offices are in Mexico, we have opened a location in Houston and we see opportunities in Central and South America. Our diversification strategy allows us to reduce the country-risk of our operations. In Mexico, we find there is a great deal of development in the Bajio area, so this office, along with our Monterrey location, are experiencing significant growth. We are developing our office in San Luis Potosi and investing in our Guadalajara location, as well. Merida and Tijuana are two places in which we could also set up operations.
Merida, in particular, offers interesting growth opportunities in the renewable energy sector, given the number of new developments for the production of clean energy. There are many innovative projects in the renewables sector and Murguía’s experience in this regard is unique. Our firm is No. 1 in surety bonds and even though we are a mediumsized broker for insurance, in the verticals of construction, infrastructure, housing, civil work and renewable energy we hold a leadership position.
Q: What is Murguía’s assessment of the risk management culture in Mexico?
A: Insurance culture in Mexico is lacking. While the concept of risk management has permeated the corporate segment much more than the overall population, we remain committed to working on both fronts and we will continue promoting integral risk management strategies. We need to advance insurance penetration in the country but this must be perpetrated by the industry, its associations and the Ministry of Finance to reach the entire population.
As a company, we do collaborate on the creation of a risk management culture and a sense of awareness. We conduct marketing campaigns in this regard and we have founded a company called Don Juan Microinsurance and Affinity that is focused on products that target the base of the social pyramid. This company works to generate awareness among those that do not feel the need to protect their assets.