President, Liberty Seguros
We made acquisitions that were part of the expansion of the Liberty Group. Until 1994, Liberty was almost a local company for works compensation in the US. Colombia was the third market we entered into outside of the US after Venezuela and Brazil. It is a region that boasts among the highest growth potential. Liberty in Colombia is today seventh in the market with around 6% market share, but our target is to rank among the top three. Colombia is outpacing the growth of other markets in terms of insurance, which is matched by GDP growth exceeding that of our neighbors other than Peru and Chile. However, in the insurance market, no another market in Latin America is growing like Colombia. In fact, over the past five years the Colombian insurance market has been growing three or four points north of GDP. Being more competitive in terms of price is essential; however, having a better and more efficient company will help us provide a better price with better services and products, resulting in growth in this market. This market has excellent results compared to others; however, for great results, we need to be more efficient in providing a better and more competitive price. We expect to be an important player in this market in 2019. We have strong financial results and are making major changes to our operating model for greater efficiency and better service.
We actually have two companies; one is a credit insurance company created five years ago and the other is a services company, which saw its 20th anniversary. 2018 was a challenging year, and the best outcome we had for the insurance company was the consolidation of our strategy which led to consistent profitable growth. Looking back, we were growing faster than the market, but due to the economic cycle, we were experiencing many claims. In 2H2016, we completely changed our strategic plan and, at the end of the same year, we arrived in a good and profitable position. This cost us some market share, but our profitability has been growing. In 2017, we were the most profitable company in our sub-sector, which represents a success. It started with the arrival of our group CEO three years ago. At that time, we created Fit to Win, our new strategic plan. With Fit to Win in Colombia, we focused on managing risks, which turned out to be the key. In our business, when the economy goes sour, so do our profits. Over two difficult years, we managed to follow the risks closely and took a careful look at the micro-sectors. We better managed our risks and invested in the enhancement of our information systems and in our risk teams. At the same time, we reduced the size of the commercial team and kept only profitable clients.
General Manager, Juan Manuel Merchán
Segurexpo has an interesting ownership structure. It has the participation of the Colombian government through Bancoldex, which is a strong and key financial institution and development bank that promotes the growth of foreign trade in Colombia. Segurexpo is also owned by Compañía Española de Seguros de Crédito a la Exportación (CESCE), which belongs to the Spanish government, and the main Spanish financial institutions such as Grupo BBVA, Grupo Santander, and big banks and insurance companies in Europe. This mix gives us an important support from our main shareholders and also a broad approach to our different markets. This ownership, the strength of our products, and our expertise in marketing and distribution allow us to add value to the market. CESCE has great expertise in the credit insurance segment in Europe, specifically in Spain, though also in Portugal. In Colombia, we are one of only three competitors in this segment. We estimate that there are around 800,000 companies in Colombia, and roughly 100,000 have the potential to access to credit insurance. At present, only 1,000 companies have this product, so there is huge potential. We have a respectful shareholder in terms of expertise, not only on the product side, but also in terms of customer service, system processes, and knowledge of the different markets and niches.
Over time, our revenues have grown from USD1 million to USD15 million, which is a result of our healthy cash flow; we reinvest all our dividends in Colombia. We have opened offices in Barranquilla, Cartagena, Medellín, Bogotá, and in 2019 we will open one in Cali. Shareholders in Colombia feel there are good margins on offer, and we still have an economic flow that allows us to keep expanding our operations. Gallagher has grown from six employees in 2015 to 135 at present. We have invested in technology, talented staff, and resources, and we have our own suppliers. Knowing that Colombia and its insurance sector has an upside, we feel comfortable doing business here. Insurance as a measure of GDP in Colombia is half of what it is in the rest of Latin America. If you take out all mandatory insurance policies, we are still an immature market. The market is not just made up of insurance companies; big retailers and banks offer good insurance policies as well. Society as a whole is getting, for the first time, a taste of insurance and that is what I think international players see: we have a lot of room to grow.
President & CEO, AON
Over the past eight years, the company has changed considerably. We were more of a local entity until 2011, and since then we have been able to transform into a company that reflects AON as a corporation more than just AON in Colombia. We have a better operation in terms of our ability to transact with insurance companies and our clients. We have invested heavily in Colombia over the past eight years and have a superior talent pool. We have adopted a diverse industry approach and developed through our go to innovation strategy. We have been developing our ability to transact with our clients and offer services and solutions in oil and gas, power gen, mining, financial institutions, food and beverage, agribusiness, construction and infrastructure. In 2018, we grew 12% in revenues terms. In terms of premiums, market growth was at 6%, while we have grown by 22%. We have been able to compete better, and are now leaner, faster and possessed of a greater talent and pool, which reduces our time to market. We bring more competitive solutions to clients. AON works as one, effectively as AON United, which explains our ability to put the best people before the client regardless of where they may be based to meet a specific need. This has given us the opportunity to retain and gain more clients.
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