The Colombian insurer aims to consolidate its position as a leader in the Chilean market, driven by an increase in demand for health coverage and a rise in the sale of vehicle policies.

Sura is taking firm steps to expand its presence in the Chilean market. After landing, following the acquisition of the English company RSE in 2016, the company has managed to position itself as a relevant player in the local insurance sector, and does not avoid saying that it will seek to become one of the leaders of the local market.

In the midst of promoting its latest product, Hogar Pro, a home insurance with a series of optional and additional coverages that adapt to each client, the firm told AméricaEconomía about its half-yearly achievements and plans for the rest of 2024.

The company's strategy, for now, focuses on two key areas: health insurance and automobile and mobility insurance. Both segments have shown sustained growth in recent years, boosting the insurer's aspirations in the country.

“After five years [of local presence] today we have a company with a certain relevance in the lines in which we want to participate, with a very complete value proposition valued by the market and that makes us very happy with the development of the company,” Arturo Geissbühler, vice president of insurance at Sura Chile, told AméricaEconomía.

One of Sura's main focuses in Chile is the development of its health insurance business, a segment that has become increasingly important for the company.

Sura's strategy in this area aims to consolidate its position as one of the leaders in the complementary health insurance market, but without aiming for a specific market share.

"What we do want is to continue growing and supporting the development of health in Chile and improving value propositions that are increasingly relevant and relevant to people. We hope to be a benchmark for a leading company, from the point of view of service and that provision," says the executive.

The Medellín-based firm has been adapting its offering to reach an increasingly broad spectrum of clients, beyond large companies.

For example, a few months ago they launched complementary health products for small and medium-sized companies, with a minimum of just three employees. And in the short term, the goal is to also offer individual health insurance, which would allow people to access this coverage independently of their employment situation.

“Given the changes and transformations in the system, what we have done is prepare for different scenarios and then continue to offer these complementary coverages, but also perhaps offer, if the future so defines, that we go from a first layer upwards. In short, it is about having the greatest possible flexibility for different types of products to adapt to whatever the needs of the system and of the people are,” the executive highlights.

This is a tangential reference to the changes that are expected in the private health market in that country, where some have predicted a collapse of the private health providers, called Isapres.

FROM CARS TO MOBILITY

Automotive insurance is also a relevant focus for Sura in Chile.

According to data provided by the executive, this segment represents around a third of the company's total accidents, with a significant component of vehicle theft.

The COVID-19 pandemic represented significant challenges for this sector, with a drop in accidents during periods of confinement, when mobility was drastically reduced. However, this scenario also brought with it other problems, such as increased vehicle repair costs.

"There was an uptick in the market, but that was mainly driven by the rising cost of the catastrophic protections we have," Geissbühler explains.

This, combined with the shortage of spare parts and the consequent increase in the cost of repairs, generated significant losses for the insurance industry.

However, the Sura executive points out that in the short and medium term, greater stability in costs is foreseen, which would also translate into greater stability in policy prices.

However, the company is moving from traditional car insurance to mobility insurance, adapting to the changing habits of Chileans, who are using mobility platforms and also getting out of the car and using other means of transport.

GLOBAL GROWTH

Sura's efforts to boost its growth in Chile are a relevant part of the group's consolidated results at a regional level.

According to recently published financial statements, in the first half of 2024 the conglomerate recorded a net profit of 5.1 billion Colombian pesos (about US$ 1,266 million), which represents a remarkable growth of 525%, compared to the same period of the previous year.

This positive performance is based, in part, on the good performance of the insurance and fund management businesses that the company operates in various countries in the region.

Specifically, the Suramericana unit (general insurance) totaled 416 billion Colombian pesos (US$ 103.2 million) in net profit in the first half, while SURA Asset Management (pension funds and asset management) achieved a profit of 418 billion Colombian pesos (US$ 103.7 million).

"The results for the first half of the year show the strength of our portfolio, which is increasingly focused on financial services, as well as the efforts of the SURA Companies in Latin America to continue growing revenues, controlling expenses and improving operating margins," said Ricardo Jaramillo Mejía, president of Grupo SURA when the results were announced.

In that pie, 75% of SURA Asset Management's commission income and 38% of the premiums issued by Suramericana originated in operations outside Colombia, reflecting the regional diversification that the conglomerate has achieved.

All this, despite the schism that meant that last May Sura requested authorization from the Colombian authorities to gradually leave the Social Security System as a health care provider (EPS), after trying unsuccessfully to find solutions to the progressive defunding of the system that affects the entire value chain and in the midst of the controversy over the state reform that is being attempted in the sector, which meant the intervention of some EPS by the superintendency of the sector.

ENCOURAGING OUTLOOK

In the Chilean context, meanwhile, Sura executives are optimistic about the company's future.

Geissbühler points out that while the local insurance market still has relatively low penetration compared to international standards, there is ample room for growth.

"Today we see greater insurance penetration, there is more purchasing, more awareness of the usefulness of insurance (…) and within the Latin American context, Chile is one of the countries with the highest penetration," said the executive.

In this line, Sura's strategy is to continue innovating in its value propositions, improve distribution channels and better communicate the benefits of insurance to the population. "It is closely linked to how strong, proactive and capable we, the industry's own players, are going to be in making this proposition reach people," Geissbühler emphasizes.

Part of this relates to the diversification of the insurance offering, where issues of climate change and cybersecurity also emerge.

In the area of cybersecurity, Sura is offering some policies for large companies, which cover data security and compensate expenses, whether to compensate third parties or costs in certain consultancies.

In the catastrophe sector, the focus has shifted from insurance against fires or earthquakes to extreme climate variability, such as floods and effects on agricultural production.

“Chile is a country that is quite exposed to climate change. It has a very large geographic diversity, therefore, it impacts in different ways: we are seeing that the most adverse climatic phenomena are becoming a little stronger, more extreme and frequent. Events that were previously very unusual in Chile are becoming a little more common,” he points out.

The company sees the possibility of weather events affecting agriculture, mining, fishing, infrastructure and people in their homes. “More and better insurance solutions will also be required to stabilize what those costs will be at the country level, at the personal level, at the industry level.”

In this sense, correct information becomes the main asset.

“There is risk and there is uncertainty. We have to work to identify these risks, measure them, prevent them and make our best estimates of what the costs may be in the future. We cannot prevent these events from occurring, but we can take measures to mitigate the impact they may have. That is our task,” concludes Geissbühler.