Mutual insurers can demonstrate their difference and competitive advantage by better claims handling, broad social engagement and through strong corporate governance, Nestor Abatidaga of Argentinian insurer Sancor told the ICMIF conference.
“Handling claims is not just about writing a cheque according to the terms of the policy,” said Abatidaga. “When there is an event we have to be next to our members, providing support and assistance at difficult times. That is where I think we are different from the rest.”
But corporate social engagement is also central to the operation of Sancor, said Abatidaga. The insurer provides support for Argentinian society, but this is also directly related to its insurance role. Sancor is strongly engaged in programmes to prevent accidents in the home, on roads and in workplaces. This reduces the cost of claims, while providing practical support for policyholders.
One of Sancor’s many social programmes is the provision of third level education for its own workers. Abatidaga explained: “We are trying to set up the first social economy university in the country.” Sancor also finances agricultural commodity trusts to enable farm producers to obtain credit.
Sancor’s corporate governance structure recognises the vast size of Argentina, by having locally elected representatives across all the country. Those representatives elect board members, creating a democratic federal structure. But this is supported by the provision of information about the co-operative to all members.
Being a co-operative also means providing policies appropriate for individual members, said Abatidaga. “Service is not about selling commoditised insurance products – we have to sell customised policies,” he said. This is especially true because of the variations in terrain and climate across the country.
As well as having a variety of business operations, Sancor is also engaged in partnerships with other mutuals and co-operatives. With the increasing economic integration in Latin America, it is essential that businesses operate across the wider geographical region, said Abatidaga. “So we have to provide coverage to people in neighbouring countries, in Paraguay, Uruguay and Brazil,” he explained. “So we decided to set up insurance subsidiaries in those countries as well.” The businesses in Paraguay and Uruguay are already trading and the operation in Brazil is about to launch. “It will be a partnership with a lending co-operative,” said Abatidaga.
Sancor was established 65 years ago and is now the largest insurer in Argentina. It has 1,580 employees, 4,650 agents and turnover of $1.13bn. This gives the insurer a 9.1% market share. “In a market where all the multi-nationals are present, we are very proud as a co-operative to be number one in turnover,” he said.