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Oscar Zuloaga Ayala

ECUADOR - Finance

The Local Hero

Executive President, ZHM Seguros


After studying Law and the Universidad Catolica de Guayaquil, and Television at TCC London, Mr. Ayala worked as Anchorman and News Manager for Ecuavisa. Then, in 1992, he started fundoZHM, a personal insurance brokerage. Throughout his career, Ayala has conducted numerous seminars and training programs. During the administration of President Gustavo Noboa, he served as Minister, and Government Spokesperson before returning to the private sector at the end of the term. Ayala leads a group of professionals based in Guayaquil, Quito, and Cuenca that offer professional consulting and risk analysis services to multinationals and local companies. Since 2000, ZHM Seguros has ranked as one of the 10 largest insurance providers in terms of volume and premiums in the national insurance market.

TBY talks to Oscar Zuloaga Ayala, Executive President of ZHM Seguros, on the importance of specialized service, changes in regulation, and consolidation.

What distinguishes ZHM from other providers in Ecuador’s insurance sector?

We present an alternative to the larger networks, and place a strong emphasis on personal service and high-quality technical solutions by having a clear understanding of how the global market and the large corporations work from an insurance perspective. We have been able to establish a matrix of service that works well for large- and medium-sized Ecuadorean corporations and at the same time for major international firms. We are brokers for SABMiller, América Móvil, Arca Continental Coca-Cola, and Bimbo among the top Ecuadorean industrial firms.

What constitutes good service for an insurance broker?

You first have to understand the nature of the business your client is involved in and begin assessing their risk exposure to determine and advise on the required coverage. In our line of business, we have to make sure we are aware and ready for more than meets the eye. Planning for the future is also another key factor to develop value-added partnerships at a whole different level with clients; it’s imperative that we can guide them through mid-term and long-term growth and expansion. Once you understand that, you can start looking for adequate insurance partners to provide them with solutions to their needs. When I speak about service, it is because our clients are accustomed to having close connections with their partners throughout the processes of underwriting policies and claims management when needed.

Has the recent influx of international companies into Ecuador changed the insurance sector?

Before 2011, an estimated 40% of Ecuadorean premiums were in hands of financial bank-lead holdings. Regulations over market power and control during that year banned all banking institutions from the ownership of any business aside from the banking business itself. A swift sale process began taking shape, with interest from the big names wanting to come in, either buying in through the acquisition of bank-owned insurers or landing a spot through local privately-owned companies at a time when the market would present them with much more attractive conditions and opportunities. As a result, household names like Liberty, Mapfre, and QBE have positioned themselves alongside already established names like AIG, Generali, and ACE. We believe this trend will continue and have a positive impact on competitiveness, the supply of new insurance solutions, it’s penetration measured on premiums per capita. But most importantly it will raise the level of awareness among clients of the true need to count on a professional and specialized perspective for their insurance needs. This situation will also present brokers with a major challenge; to rethink ways to align ever more demanding offers with a new wave of solutions being offered by new players, while maintaining an added value concept for both of them simultaneously.

Do you think that is going to lead to consolidation within the rest of the market and among smaller Ecuadorean players?

We must take into account the previous sale process started back in 2011, and the new regulations in force will require a substantial increase of capital for most companies, and tighter management of assets and reserves. All players will face the added burden of raising their capital adequacy levels and margins, which will undeniably have a negative impact on their profitability and make further consolidation inevitable.

Do you consider regulatory reform of the insurance sector to be positive?

The new regulations have the virtue of placing more emphasis on the strength and viability of the insurers that will carry on doing business in the next 18 months. But it presents a challenge to the new authority in allowing the companies to continue with sound business practices without overregulation and interference. It’s too early to measure the full impact of the amendments just executed.



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