Opportunities for double-digit growth in life re

Products and penetration in the Latin American life reinsurance market are not as mature as those in the US and some of European countries, creating “unique opportunities” for double-digit growth in certain Latin American countries, such as Brazil.

This is according to Pedro Farme, who serves on the Latin America and the Caribbean executive committee at Guy Carpenter.

“The reinsurance purchase has some slightly different motivators at play; some of the main factors are the quest for transfer of knowledge in a line of business, the offset of severity exposures and the need for increased capacity,” says Farme.

In addition, some countries are exposed to natural catastrophes, which increases the limits purchased in these territories.

“As the market and insurance companies operating in the space become more sophisticated, there is a rise in more complex demands,” adds Farme.

Guy Carpenter has increased its participation in this market in territories such as Argentina, Brazil, Colombia and even Chile and Mexico, which are “more difficult to penetrate as intermediaries”, he adds.

“The life insurance landscape in Latin America is no different from the global market, which has been pressured by low interest rates, new capital requirement regulations for long-term products, aggressive competition and increased longevity in the population,” says Farme.

“We have seen international players seeking diversification to overcome growth frontiers: they enter new territories, offer new assistance products and capital markets-related products and they pursue new target segments.”
Erik Lakatos, who also serves on the executive committee, adds: “Guy Carpenter has been able to penetrate the segment by adding value through innovative products and solutions to complex risks such as longevity, health and non-standard life risks.”

According to Lakatos, the need for more dynamic life reinsurance arrangements is apparent as enterprise risk management is becoming an important part of running a company.

“This means that an efficient reinsurance purchase must link strategy, risk appetite and capital management to the company’s entire perspective.
“As the complexity of solutions required in this new environment increases, actuarial techniques have developed, enabling access to more data and a better understanding of risk,” he concludes.

Meaningful changes
There have been “meaningful changes” in Guy Carpenter’s strategy for Latin America, starting with new leadership in the LatAm and Caribbean regions.

After more than four decades in the region, Guy Carpenter’s previous chief executive officer, Aidan Pope, retired at the beginning of July. The region is now led by an executive committee.

Roberto Calderon, a member of the executive committee, explains: “This group comprises members with backgrounds from Guy Carpenter and JLT, which will allow us to shape Guy Carpenter’s future in this vast and diverse geographic region into a fresh and newly combined strategic perspective, founded on a client-centric approach and enhanced value proposition.”

Anthony Mirabal, the fourth member of the regional executive committee, adds that through Guy Carpenter’s expertise and reputation in the region, and in conjunction with its analytics offerings and strategic advisory services, “we want clients to know that we can help them with their needs and challenges”.

He adds that in this competitive market, efficient and effective transactional broking is the bare minimum that is expected.

“It’s no longer considered a ‘value add’ in the transaction; it is simply a part of the role,” explains Mirabel.

He says: “The value proposition is continually expanding and reinsurance intermediaries are viewed more often as extensions of the available company resources, capabilities and expertise.”

According to the committee, Guy Carpenter has updated its value proposition to that of a strategic advisor role in which the emphasis is to deploy its range of capabilities and expertise to help clients solve problems and maximise opportunities and returns.

Mirabel concludes: “Our goal is for our clients to see us as an extension of their operation and not as an outsourced partner.”