Monday, Jun 24, 2019
Industry & Trade | North America & Caribbean | Mexico

Auto insurance shifts into top gear


7 years ago

Joaquin Brockman Lozano, CEO of Qualitas
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A growing awareness of the value of insurance, and simple demographics, point to further growth for Qualitas, Mexico's leading auto insurance provider

After less than two decades in the Mexican insurance market, Qualitas, founded in December of 1993, has already managed to overtake its well-known competitors such as GNP and ING in the automotive sector.

Some 99.2% of Qualitas’ business is related to automobiles, though it expanded its portfolio to include home insurance with the acquisition of Monterrey New York Life in 2001. With steady increases, including a rise of 15.26% in the number of policies issued in the third quarter of 2011, Qualitas is consolidating its role as Mexico’s auto insurance leader.

Joaquin Brockman Lozano, CEO of Qualitas, explains, however, that when the company began in 1993, the automotive branch of the insurance industry was not viewed in a particularly favorable or lucrative light. While competing insurance companies preferred to concentrate on other sectors, Qualitas saw specializing in auto as an opportunity to create their own niche, and pull ahead in the insurance industry. The company, which started with just 36 employees, had within 14 years recorded a total turnover of more than US$780 million.

Mr. Brockman explains that conditions such as the average age of the population, and the difference between the number of people with cars and those with insurance, give his company huge potential for yet more growth both in sales and in innovation.

“Only about 8 million out of 30 million automobiles are insured [in Mexico]. This is a positive fact – because this gap is gigantic and it creates more opportunities for our company,” says Mr. Brockman. “The country is becoming more conscientious and responsible, seeing the importance of being insured, which obviously will be an advantage for the automobile insurance market.”

“Only about 8 million automobiles (out of 30 million) are insured [in Mexico]. This is a positive fact – because this gap is gigantic and it creates more opportunities for our company.”

Joaquin Brockman Lozano, CEO of Qualitas

He elaborates that of the 110 million people in Mexico, the 30 million that own cars is a relatively small number compared to other countries. So, as the nation further develops, there is clear evidence of yet more room for expansion.

Additionally – and ironically – as the number of stolen vehicles increases, especially within Mexico City, so does the number of people who want to insure their cars.

“More and more people want to insure their cars because of the level of robberies, especially if their vehicles are American, because the traffic laws require it,” explains Iris Jaquez Rey of Qualitas. Whereas in Mexico it is not required by law to have car insurance, Mexican cars that travel to the United States are required by American law to have proper policies. 

On the other hand, many American drivers that cross the border are not covered by their insurance in the Mexican territory. Qualitas is the leader for insurance policies of American cars, covering them when they are driven south of the U.S. border.

Another contributing factor to the possible expansion to the auto insurance market is that in Mexico the average age is 27, much lower than its American or European counterparts. “This is going to create a sea of opportunities in the market.”

The company’s growth, however, is not just being seen in Mexico, but throughout Central America, and even in the United States. In addition to more than 170 offices within Mexico, the majority in Mexico City itself, Qualitas has opened its business to El Salvador and Costa Rica, which Mr. Brockman says hold similar potential to Mexico.

“We are trying to expand throughout Latin America and learn to implement our model there,” explains Mr. Brockman. “The idea would be in the future to go to Colombia or Peru, which are bigger markets, although not much more than what we already manage here in Mexico.”

But for Mr. Brockman, the sales side of the business is mirrored by the equally important quality of the service provided. In fact, the name Qualitas in Latin means quality, which is also seen in the attitude of the organization. Qualitas offers a variety of services to its customers including those for individuals, taxi fleets, travel abroad, mechanical problems, and public services.

The loyalty of the satisfied customers lends Qualitas the opportunity to also grow in innovation and technology, by always seeking to offer clients the latest products. Its slogan “the new generation in automotive insurance” describes its goal to meet the diverse needs of protection and safety of its customers. For example, Qualitas’ localization system, Encontrack, was developed to allow better control over insured cars, by knowing where they are at any given time, and aiding in their recovery if stolen.

“It is especially useful for vehicles of a certain scale, or cargo trucks,” explains Mr. Brockman. “The company puts a device in the vehicle, and in the case of a robbery, the system enables us to recover the cars and trucks that have been stolen.”

Mr. Brockman elaborates that 25,000 vehicles have already been equipped with Encontrack, and that its presence and success has greatly reduced the number of thefts.

With its advancements in technology in the sector, as well as its commitment to its ever-growing customer base, Qualitas strives to be the best Mexican auto insurance company, always maintaining top quality.
“We had an opportunity to move forward within the industry,” says Mr. Brockman. “I am so glad that I can see our company growing day by day.”

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