Embrace diversity to succeed in Latin America

A key to success in Latin America is recognising that it is a very diverse region with varying cultures, says Louis de Segonzac, head of Amlin’s Latin American business.

“One of the challenges is to make sure we understand that and adapt to the specifics of every country,” he said.

“We are also very lucky in the sense that the region is made up of many different countries, so while one might be going through difficult times another might be growing twice as fast, meaning that overall there is always growth in the region.

“Another challenge is to develop a profitable portfolio while recognising that our clients are in a very competitive environment, and we need to help them stay in business. It’s a matter of reconciling our need to make money with the need to help our clients be competitive at the same time.”

Prices, the soft market and how long is it going to last will be hot topics at FIDES, de Segonzac added.

“Some clients are asking for two-year contracts these days, thinking it might change. It’s the question of the year: are prices going to continue to decrease or not? Nobody is really sure.

“There is certainly tremendous reinsurance capacity in the region—Latin America is attractive so a lot more reinsurers are active in the region. Prices may be stabilising in other parts of the world and I hope we are a mature enough industry as reinsurers in the region to be able to do that as well.”

Amlin’s reinsurance drive in the region has very much been cat-driven from London, but the company is working to achieve a diversified portfolio, which means also writing non-cat business.

“We’ve been quite successful in doing that this year, picking up some key pieces of business which have helped us achieve that goal,” de Segonzac said.

Amlin will continue to do so, and is looking at Brazil as a potential area of opportunity.

“We are watching that space very carefully as to what our next steps there will be,” he said.

In the future he expects more multi-latina companies to emerge as regional companies expand by buying other companies in the region.

“It’s their time now. A lot of companies are very powerful, have a lot of cash in hand and need to diversify. They will expand into the countries next door and become regional power players.

“They will still have to rely on reinsurance but perhaps to a lesser extent than local companies.”