A period of rapid growth in LatAm

“Four years ago we had nothing: no people, no offices, no infrastructure, no policies. Now we have more than 220 people across Latin America.”

That is the extent of Arthur J Gallagher’s development over the last four years in the region, according to Lionel Soffia, chief executive officer of Latin America at the broker.

“We set out to be top five in all the markets we choose to play in, and in some we’re even ahead of plan, already a top three broker,” he stated.

Although it’s too early to talk of market hardening, a turn in the cycle now is good news for Gallagher.

“If this had happened four years ago we wouldn’t have been ready or in a position to benefit from it,” explained Soffia.

“The large catastrophe-exposed losses in America and Central America, coupled with those emanating from the Mexican earthquake, should have the effect of at least stabilising rates after a prolonged soft market,” he said.

Focusing on the market in Peru, Pietro Solari, chief executive officer of Gallagher in the country, explained that the broker is evolving and expanding.

“Historically, our focus has been on big heavy accounts, which naturally brings volatility to a portfolio. This is now balanced by the smaller and mid-sized sector which we are actively targeting and, with less than 13 percent of Peruvian assets currently insured, the opportunity for growth is significant,” Solari said.

In terms of countries, Gallagher is very much where it wants to be: Chile, Peru and Colombia as well as in Mexico via its joint venture with INTERprotección—with the possibility of adding one or two others, said Soffia.

While its focus is firmly on organic growth and nurturing young talent, he said Gallagher still has an appetite to buy companies (provided they share a culture of teamwork and integrity, as well as Gallagher’s philosophy of being a broker run by brokers).

“Everyone is looking for new products and new niches and we believe this is precisely where we, as Gallagher, are adding value,” said Solari.

He explained that Gallagher is dedicating the time and resources needed to create new broker-led solutions and enhance existing products in order to “give our customers new opportunities and allow them to expand their own customer bases”.

The region has faced a quiet period for economic growth, stated Soffia, driven by “depressed commodity values and internal politics”.

But there are signs of a new positive cycle of growth emerging.

“Not only has the value of commodities been recovering, but in many countries we are seeing the implementation of government policies that are helping the market up, increasing stability and creating more open economies,” he explained.

“If patterns follow those we have seen before, a 3 percent or 4 percent growth in the economy could produce insurance market growth of as much as 6 percent or 7 percent,” claimed Soffia.

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