Breaking In, Breaking Out

What peculiarities characterize the environment in Peru?

Every player in the Peruvian financial system uses a different terminology to refer to the concept of bonds, including international institutions. This can create confusion. Some of the bonds we deal with in Peru are considered “first demand,” which makes the underwriting very important.

Do you work alongside public authorities to implement clearer rules for the system?

We have done a lot of work with the public administration in terms of credit insurance, which is a useful tool for governments to boost foreign trade. The sector has seen a lot of innovation in the last few years. We have an agreement with COFIDE within the Programa de Seguro de Credito a la Exportación (SEPYMEX) program, in place since 2002. We have an exclusive agreement by which 50% of every export of Peruvian SMEs is covered by Secrex, making us the leader in credit insurance products for exporting companies.

What role does new technology play in the development of the company?

This is a major part of our development and we have signed partnerships to leverage our capabilities in this field. New technologies have been key elements in our activity, especially in the bonds area where we have done a lot of work in automating underwriting. Custom agencies bonds are one such example. At the moment, around 60% of our performing bonds are within civil works and the remaining 40% are customs agencies and casinos. We have a strong focus on developing the latter two. We also harness our knowledge and 35 years of experience to help foreign companies, many from Spain, as they enter Latin America. This structure has slowed down the decision-making process, but strengthened our efficiency and global capabilities.

What is the potential of Peruvian SMEs?

The SEPYMEX program is the best example we can give, and the fact that the government wants to extend it is a clear statement of the role these businesses are set to play in the future of the Peruvian economy. We have seen SMEs reaching many new markets in the last few years, and this is thanks to the export capabilities of this country, regardless of its size. For example, agribusiness is one of the sectors with the greatest potential for the near future. SMEs have great potential for export activity due to the fact that Peruvian products are sold at higher prices in foreign markets.

What other sectors will underpin Peru’s future growth?

Apart from agribusiness, the mining industry is set to play a key role in Peru’s future development. Peru has large mineral resources and, though these are mainly non-insurable commodities, we see more sophisticated derivate products. We have one customer exporting to as many as 55 different countries.

How do you see Secrex evolving in the near future?

We would like to introduce certain products and programs we have in Spain. For example, for a while credit insurance was dying out in Spain due to extreme competition and players being extremely pushy. That changed with the construction bubble and the financial crisis that hit the country a few years ago. So we started offering other side services rather than bringing down prices, one of the main trends. This was also driven by the necessity to reduce the impact of the bad claims we had back then. In this context, we developed the “CESCE Master Oro” policy, introducing variable prices and breaking the prevailing paradigm in the industry. This has evolved into the “Pay-Per-Cover Policy” or the “Full Cover” we now have in place, where the customer decides what they want to insure. Overall, we offer a more personalized product in a more attractive platform on the internet, changing the way the sector operates.