Digital transformation offers great opportunities in LatAm
Digitisation of insurance systems offers considerable potential to improve efficiency and the development of new distribution and sales channels, but the biggest opportunity stems from the improvement of the customer experience, says Matthias Marwege, executive director of Munich Re for Spain, Portugal, Latin America and the Caribbean.
The insurance sector in Latin America is growing again. A variety of factors point to a positive development: economic forecasts look more encouraging. After hitting a low in 2016 a notable recovery of premiums was seen in non-life insurances.
In turn, digitisation offers a considerable potential to improve the portfolio, efficiency and in particular the development of new distribution and sales channels. However, the biggest opportunity for transformation stems from the improvement of the customer experience. The contracting of insurances and processing of claims can be automated to a large extent—that is, expedited—and big data can facilitate the development and offering of custom-made products for clients, for example, coverage for diabetics, on demand products or telematics rates. In this way it will also be possible to increase the market penetration of insurances in Latin America, as in many other emerging regions.
Insurance markets in Latin America grow above average
In total, the countries of the region will be part of the insurance markets with the highest growth until 2025. The growth of non-life premiums will probably reach 3.4% pa adjusted for inflation. Said number is clearly higher than the global average of circa 2.6%. As a result the outlook is clearly more favourable than in the past year.
In 2016, the income from non-life insurance companies fell by 3% due to the exchange rate. In particular low commodity prices and devaluations weighed heavily on many countries. Hence, last year Latin America found itself in a recession with a 0.5% decrease of the actual economic output (GDP).
