Regulations can slow progress in LatAm

Broker  Oneglobal has grown its footprint rapidly in Latin America in recent years and has 50% year-on-year growth tipped for 2023. It will soon announce its launch in a new country in Latin America, although the country is still not named for regulatory reasons.

However, according to Nicolau Daudt, chief executive officer LatAm at Oneglobal, regulatory barriers can make life difficult when it comes to entering new markets.

“We want to be in more countries, but some regulations can slow down our entry,” he says. In some countries, obtaining a licence for broking can take up to two years.
“This is an impediment for healthy competition and favours the oligopoly that the mega brokers try to build in the market,” warns Daudt.

But regulation has generally improved over the last 20 years, he adds, noting that “governments used to look at insurance as something secondary to the financial markets”.
Now, says Daudt, both insurance and reinsurance are top of the mind for governments and, consequently, for regulators.

He adds: “It is very important that we have strong regulation in the region to avoid bad experiences for clients and to fight corruption, a theme so strong in the history of our region. I see the progress of the sector with great optimism: clients are more aware of risks, which will increase insurance penetration, and regulators are more prepared to investigate and penalise wrongdoers.”

A safer place

As regulation develops, Daudt expects to see more risk-based approaches to ensure the market is fully functioning and remains competitive, which in turn should hasten the approval processes and provide more oversight.

“All of that will make Latin America a safer place for clients and for those who invest in the region and need reliable insurance protection for their businesses,” he says.

Another change Daudt has seen in the region over the last 20 years is that clients, insureds and cedants, have moved from a cost culture into a risk management culture.
“Most clients 20 years ago did not even know what a risk manager is; today most of them have one. This has happened over the last 10 years,” he says.

“Clients are buying their coverage more carefully, looking at how to best protect their assets and their people, and using sophisticated tools to measure catastrophe exposure.
“We must all be proud of our region because, today, we are not far behind the most sophisticated insurance buyers in the world.”

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