(Image source: AdobeStock.)
As Insurance Innovation Reporter gears up for its second annual Latin American Insurance IT Executive Summit, we decided to take the opportunity to discuss what is driving interest in the region. We called upon Jason Sahota, CEO, Charles Taylor InsureTech Ltd. (a division of Charles Taylor PLC). The London-based firm focuses on transformation in all areas of the insurance value chain through both consulting and solutions. It has over 200 permanent employees—a quarter of which are dedicated to post-implementation services undertaken globally for insurers—and has access to other resources. On the solution side, Charles Taylor offers six core technology platforms that it has developed (or co-developed) or invested in, including the INSIS policy administration system for life, health and property/casualty; an end-to-end broker system, a document management and workflow platform; a specialty lines claims management system;the TIDE delegated authority solution that enables the submission of bordereaux in any format and converts it into a single standardized forma; and an analytics solution. The firm operates predominantly in London, Mexico and Buenos Aires, and has global delivery capabilities centered in Dubai and Manila.
Insurance Innovation Reporter: We meet plenty of Europe-based technology companies seeking to break into the U.S. market, for the obvious reason of its size ranking. What motivates a British company to pursue the Latin America insurance technology market?
Jason Sahota, CEO, Charles Taylor InsureTech Ltd.: It’s easy to forget just how many countries are in Latin America. There is about $6 billion of insurance technology spend in the region, and we decided to take a first-mover advantage and invested earlier than some competitors.
IIR: We’ve seen emerging markets in Asia develop rapidly; do you see a similar opportunity in Latin America?
JS: Yes, as countries in the region are growing economically, the insurance industry is growing. As that general economic growth proceeds, insurers, brokers and MGAs, across personal and commercial lines are having to revisit how they’re servicing their clients. They need our help, and we’re happy to help them. As in other regions globally, insurers’ M&A activity has created integration challenges, and many core platforms are in need of refreshment.
IIR: What measures are you taking to address any barriers to entry? Is this a market amenable to companies from outside the region?
JS: Insurers have traditionally been served by the regional market vendors, though I think there’s an increasingly global perspective about commerce in Latin America as elsewhere. That said, as an international player, it was very important that we brought our best-in-class international solutions, but also that we became local to the region. Toward that end, we established a base in Mexico as a global hub of excellence in the north of the region, as well as a center in Buenos Aires in the Southern Cone—one hub was simply not enough given the scale of the region.
IIR: In my experience, senior insurance executives in Latin America typically speak English very well in addition to their native languages of Spanish or Portuguese. Has that helped?
JS: We don’t look at it like that. We believe that it’s very important, as any international company expands into different regions, that it’s able to speak the local language. Latin America is very relationship-driven culture, and we see common language as a baseline. Toward that end we announced the appointment of Gonzalo Geijo to regional sales director in Jan. 2017. Gonzalo joined us from Buenos Aires based consulting firm Sistran, where he had led a business development team that undertook major technology implementations for insurance clients in the region.
IIR: Leaving aside the question of language, how open are Latin American firms to non-domestic business relationships?
JS: Very open. In part that’s because right now there’s a real appetite in the region to look to the future, not just today but for coming generations. There is also broad buy-in at senior management for change and an appetite to work with international players and take advantage of the quality of solutions they offer. Insurers want to get their organizations to a different stage of evolution; they want to capture some of the experience and lessons learned from more mature markets, such as the U.S. and Europe. And, of course, many of the regional companies are owned by international players. There’s a great opportunity there, because even though an insurer may operate over seven or eight companies in the region, they will use the same solution.
IIR: We’ve seen how developing nations have been able to bypass levels of technology and leapfrog to the latest—for example, some countries never developed telephone networks and were able to go directly to mobile. Are there analogous opportunities in the realm of insurance technology?
JS: Yes, I think you could say that with the appetite for change I mentioned, there are also opportunities for leapfrogging, technology-wise. Not that I think this is exclusive to what might be called the developing world—or that Latin America as a whole falls within that characterization—but technology from other markets is certainly giving insurers there capabilities to do things without precedent or earlier-stage versions. That’s true of the whole wave of mobility, the Internet of Things. And these things in turn are engendering a new category—and massive volume—of data that has tremendous potential for both personal and commercial lines. Companies will have to be able to consume it to start to analyze it, and a lot of our solutions are built to capture data that way.
I would add that along with the advantages, there are challenges. As the economy grows, you have to implement the physical network structure, and there are physical obstacles, for example, the Andes.
IIR: In closing, could you share with us one of your major wins in Latin America?
JS: Sure. We have a client in Peru that selected us to implement the INSIS system for all lines of business at the end of 2016. It’s an interesting engagement because they are an important insurer, but also because we had acquired a stake in Fadata, the provider of the system chosen, in 2015. The client’s goals through the project are to not only maintain its leading position in the market, but to achieve even greater results through superior customer service and improved product speed-to-market.