Argo seguros has strategy focused on specific niches products

By Carlos Pacheco

Is it possible for a company with only seven years of history in Brazil, to have expertise in its field? The answer contradicts a rushed analysis of facts and signals an example of vigorous action. A company specialized in transportation insurance, property risks, general and professional liability, Argo Seguros has been operating in the country since 2012.

The company is recognized in the market for product quality and excellence in service to policyholders and broker partners. Its strategy is focused on the elaboration of products aimed at specific niches, always seeking to be close to insurance brokers.

The company ranks among the top five in International Transportation and Professional Liability. It is a subsidiary of Argo Group, headquartered in Bermuda, with over 60 years of experience and operations in 134 countries. In the first quarter of this year, the group posted net income of US$ 91.2 million, well above the US$ 24.8 million recorded in the same period last year. In Brazil, Argo Seguros also performed well from January to March. According to CEO Newton Queiroz, the volume of premiums issued in the period reached 105% of the target set and more than 20% growth compared to the previous year. The second quarter, despite not yet having totaled numbers, follows the same perspective.

At the company’s headquarters in São Paulo, Queiroz hosted Insurance Corp editorial describing on some topics, from Argo’s role in the market, the products offered, automation of solutions and the mobilization of brokers. The executive has over 20 years of industry experience. He took charge of Argo Seguros in early 2019 (formerly Newton was CEO of a major insurance group for Mexico and Central America where he resided for three and a half years). “The company expects to grow at least 25% this year, always profitably”, he said. See Queiroz’s comments:

Transportation

Argo can contribute a lot to the transportation segment. We offer cargo risk solutions to the shipper or carrier. We have expertise in customer service and risk management, which enables the movement of exports and imports, as well as interstate traffic of inputs and primary goods. The company supports, through its services, the arrival certainty of products efficiently. Our risk management plan assesses how to minimize any unforeseen customer issues.

Surety

We are among the top ten US companies in surety. We are sure that we can help in Brazil’s developement. We align with Argo Group’s strategy and global expertise. We returned to operate in this sector in 2018 actively and the results are positive. We are focused on specialty and help medium or large firms. We present our partners with a long-term plan, whether they are the international clients we already have, enabling their capacity in Brazil, or new national and/or international clients.

Property risks   

In the property sector, we offer complete solutions for high performance bikes and miscellaneous hazards, such as coverage for photographic equipment and photovoltaic plates. Regarding traditional property, we are working on developing solutions for small and medium risks through technological efficiency. When it comes to strategy, we always focus on risk quality and contract conditions. We like to differentiate ourselves not only in price but in technology. We idealize solutions that demand fast hiring.

“Complex” portfolio 

We participate in risks that are not exactly the simplest. Our transportation, surety and D&O portfolios are complex because we like to structure solutions. We improved our results quarter by quarter. Combined with focus and expertise, we demonstrate agility and efficiency on the right scale. After all, we are a company that issued R$ 210 million in premiums in 2018 and achieved leadership in the E&O and bike insurance markets, for example.

High potential insurance   

Argo is convinced that Professional Liability Insurance has great potential for sale. Today, this market makes little money and could grow ten times as much. As the insurance culture is spreading among people, we will be able to market products like this without difficulty. We can offer E&O to a wide medical corps of certain hospitals, which will require considerable resources, or even a medical doctor who needs a lower limit. It is a broad spectrum in services. Undoubtedly, liability insurance shows an interesting potential for growth in Brazil. It is noteworthy that we offer solutions to over 40 professions (such as engineers, doctors and accountants) via our digital platform, with limits up to R$ 1 million.

Process

automation     

Our transportation team is lean, but it gets excellent results. Why? It is the automation. Our digital platform is one of responsible for our leadership in the E&O market. The corporate world will never be 100% digital, because you need to make direct contact with the underwriting and the broker, for example. But on the other hand, you need to automate processes and gain efficiency and scale – the customer likes it and broker as well. We believe in a lean structure, adding skilled people, and with automation. Therefore, we were able to make a profit not only in Brazil but abroad. Since 2012, the company has been working with digital insurance and has always been one step ahead of the market for its size and efficiency. We understand the needs of the industry and the Brazilian customer.

Product lab     

I do not consider it appropriate to launch digital (or traditional) products without first testing them. Today, to create a product and approve, the cost is high in the process. Prior to this, Argo tests the concept. It worked, so we’ll think about digitization and the solutions submitted to a lab. All insurer teams are involved in this.

Company units     

Argo is divided into two units: Consumer, responsible for products with intense distribution – digital, affinity group and / or facility – and corporate, which takes care of medium and large risks. In the corporate area, we innovate with automation. There are brokers who serve clients in both units, and some work in one or the other. Overall, at Argo’s operations, everyone sells. If the policy is not well defined or if there are problems adjusting the claim, the company will lose a sale. After all, we are a service company and everything has to work well.

Protective Platform   

Let’s relaunch the platform with a new look. We will highlight the differentials of the time of its launch in 2012, and those of now. The differential is per product. The hiring limit of our Professional Liability (RC) extends up to R$ 1 million. I would say this is a specialized broker market. The professional needs to know how to sell the product to doctors, engineers, lawyers, accountants, architects, beauticians, among others. There is a fact that makes us very happy: when analyzing the data of the Protector, we noticed the adhesion of a large number of brokers, more than 5,000 registered. On the other hand, we find insurers that want to enter this market because they see an interesting niche in it. But the attempt to massify a ‘long tail’ product will have no effect. Any adjustment will only bring long term results. I just hope the market doesn’t want to ‘commoditize’ a portfolio that doesn’t have the commodity feature.

Roadshow experience   

I have always argued that the market cannot be circumscribed in major capitals like São Paulo and Rio de Janeiro. There is a lot of potential outside these centers. Looking at us as insurers, our obligation is to leave headquarters, visit other states and explain Argo’s concept and vision, and spread the insurance culture. The target is to make us an option for brokers, who often would like to work with us but didn’t even know about our existence. Company executives explain how their respective areas work. We have done roadshows in Belo Horizonte (MG) and Londrina (PR). Other visits are already scheduled.

Argo and the market     

Argo expects to grow at least 25% this year. The idea is for this growth to be continuous and profitable. There are many opportunities to be prospected. Insurance penetration has improved in Brazil, but we have a long way to go. There is a lack of solutions for various types of customers. We need the right products and the right coverages and prices. We believe in the concept of protection and insurance, that is, we always aim to have the insured protected. It is in this spirit that we aim to grow our company exponentially in the coming years, always with operating profit; obviously with the work of our brokers and partners.