Just over a year after it acquired Algico's T&T business in July 2012, the Pan-American Life Insurance Group (PALIG) reported in its financials that for the first eight months of 2013, its T&T operations "continued to show growth in the market with increased sales of 38 per cent."In a telephone interview from his New Orleans, USA head office, Jose Suquet, chairman of the board, president and chief executive officer of PALIG, credited changes in management, customer retention and new high-end customer acquisition for the growth.
He said that although this is PALIG's first experience in the English-speaking Caribbean, the company implemented many changes, invested in key areas and expects even better results going forward. He said the high-end "private client" business in T&T has grown double what PALIG projected and he sees a market still ripe with opportunity in the wake of the CL Financial failure.
"Our retention of the business has been improving since we've taken over," he said. "Our agents are very excited. The brokerage community on the corporate side have been very receptive. The business community at all levels has been very receptive. We're very pleased and have a great working relationship with Mr Carl Heeralal, and the whole regulatory authority that exists in Trinidad."
He said the company made "significant changes in a number of products" and also "changed the entire management team.""Our total Caribbean revenue is up 14 per cent, led by our life business where our first year premiums are up 30 per cent in the first six months of 2013."Suquet said group corporate business went up nine per cent in that period as well.
"We've had very significant increase in revenue and I think we're just scratching the surface. I think we see very significant opportunities for continued growth, throughout the region, and specifically in Trinidad," he said.The T&T operation serves Barbados, the Cayman Islands, the Netherlands Antilles (Aruba, Bonaire, Curacao and St Maarten), St Lucia and other Eastern Caribbean countries.
Government-appointed chairman of the Unit Trust Corporation Wendell Mottley also wears a hat at PALIG. He is on the board of directors of the holding company.
"We really wanted to add to our holding company somebody with very extensive ties in the region, and I had an opportunity to meet Wendell Mottley during the due diligence process, and we became well-acquainted and we invited Wendell to join our board earlier this year at the holding company level; and Wendell has been our biggest supporter, not just in Trinidad but throughout the region. He's such a widely recognised and respected individual in the business community," Suquet said.
Projects further growth
Asked what he was basing growth projections on at a time when other insurance companies in the region are suffering losses, Suquet said: "We have done significant re-branding efforts and we have great financial stability which is very important. We recognise, as we were doing our due diligence the entire Caribbean has gone through financial shock since the collapse of CL Financial, so there is really an eroding confidence in this sector.
"We felt it was a good opportunity to position Pan American as number 1, a company with over 100 years' experience, very strong financially–and we communicated our different ratios, our ratings with the credit rating agencies, the quality of our balance sheet, the diversity of our balance sheet."
He said PALIG then "made it very clear that we are very people-oriented. We're a life, accident and health insurance company, and we serve both the individual and the corporate market place, multinationals, but we're not in the property casualty business.
"We don't have a bank. We don't have an investment company. We're not a conglomerate in that sense. We're a holding company that has assets throughout Latin America and the English-speaking Caribbean, but it's purely focused on the life, accident and health arena, so all of our revenue, all of our earnings, all of our reserves are all linked to the life and health area, and that really resonated with some of our top customers on the corporate and individual side.
"It totally resonated with the regulators, so that (with) early acceptance we see opportunity combined with the overall affluence of many of the countries in the English-speaking Caribbean–after all, some of the highest GDP per capita in the Western Hemisphere are in the English-speaking Caribbean," he said."So with the confluence of those events, and the corporate side and the high net worth side, we see an opportunity to introduce some of our services and products."
Suquet said he expects the company's high-end products for the high net worth people of T&T to continue to do well. "Right now the competition is made up of offshore companies, and we're the only complete, legal onshore option for residents, and it's worldwide coverage that we offer," he said, adding that "our sales have more than doubled our expectations." Suquet said PALIG has received "enormous receptivity in the Trinidad marketplace. Our private client sales doubled our expectations."
PALIG has a major medical business, he said. Premiums in this line of business grew by around 65 per cent in T&T. This compares with 35 per cent growth for the holding company as a whole in the first six months of 2013.PALIG has "a proprietary provider network that we're just building," Suquet said. "This proprietary provider network has high-quality doctors, hospitals throughout Latin America as well as in the US."
He said PALIG has a complete network in Colombia like it has in the US, and by using the Colombia network, clients are able to have significant cost reductions versus using the medical network in the US."It's just an example of some of the innovation that we're doing on the product side," he said.
PALIG has also introduced new products, he said. This includes the term insurance product, as well as critical illness products for the middle markets, and from the first quarter of next year, he said PALIG will be introducing a universal life product called "Life Access" that "will compete, not necessarily with the products that currently exist in T&T, but with the offshore products that are being marketed illegally by companies that are not admitted, and that's our target, to register the product in the country, and provide a very viable, very competitive product offering to the higher net worth individuals, which normally would not have been available other than through the offshore people."
With any product PALIG offers, Suquet said naturally clients could see a doctor in T&T but the company also gives its clients the option of having access to its provider network in other Latin American countries like Colombia and the US. He said that a lot of people look to go international when they have something serious.
"We have throughout Latin America, something called PALIG Med which is our own provider network through which we have contracts and agreements with all the leading hospitals and doctors and laboratories in all of these countries. So we give our customers in Trinidad the option to use the Colombia network which, although is not as expensive as the US, boasts of a "quality is emerging to be very high." Nonetheless, clients who so choose can still use his company's US network.
"So we have all the leading hospitals and many of the top doctors and specialists as part of our network and we've been doing business in Colombia since the late 1930s," he said.
Asked if life, health and accident insurance is immune to the ups and downs of economies, Suquet said tough economic times will affect everything but "I think the bedrock of financial security is to make sure that some of the basic insurance needs are met, so there will always be a market for that. Furthermore, the high net worth segment that we aspire to, sometimes is a bit more insulated," and they have the means.
Finally, he said, corporations throughout the region will continue to need to provide their employees with benefits. "They may dial down in a tough economic time. They may perhaps not cover as much in tougher times, but they will provide certain basics such as pension, group life and group health benefits to their employees," he said."What we're selling is trust. We're selling a promise to deliver when the company or the individual needs us to deliver. The insurance business is all about trust and confidence."