How Pro Global plans to grow in Latin America

London-based Pro Global is a consulting firm that offers specialized solutions for the insurance and reinsurance industries.

Its services include consulting, auditing, outsourcing, and bordereaux management, which is a detailed accounting statement containing a list of premiums and losses generally ceded under a pro-rata reinsurance treaty.

Pro Global has operated in Latin America since 1999 and plans to expand its footprint in the region. In this interview, BNamericas talks with regional director Martin Smith about the expansion plan, M&A, the Argentine market, natural disasters, the mining sector and the energy transition.

BNamericas: What is the current presence of Pro Global in Latin America and the Caribbean, and how important is the region to your international business?

Smith: Pro Global has established a strong presence in Latin America with an office in Buenos Aires, housing over 45 staff, along with a smaller office in São Paulo and a representative office in Lima. Additionally, we have cooperation agreements across the region. The Latin American market is a key pillar of our international business strategy.

BNamericas: What are the expansion plans for the region in terms of entering new markets or expanding your footprint in existing markets?

Smith: We are actively working to expand our operations in Brazil and are keen to establish full offices in Mexico and Colombia. Our goal is to strengthen our footprint while maintaining our service offerings across the region, where we’ve already successfully delivered projects in most countries. Despite our extensive work in Latin America, the Caribbean remains largely untapped for us. The region's vastness requires a targeted and gradual approach as we continue exploring opportunities.

BNamericas: What kind of year has 2024 been in terms of M&A in the region's insurance industry, and what do you expect next year on the dealmaking front?

Smith: The M&A landscape varies significantly across Latin America. In Argentina, for instance, deal activity has been limited due to political and economic challenges. However, we have seen acquisitions, such as HDI in Brazil and the sale of some Sura subsidiaries across the region. 

The insurance market, particularly in countries like Argentina, is facing challenges with a disproportionate number of companies relative to market demand. A more consolidated market through M&A could result in a more sustainable competitive environment.

BNamericas: Is there a strong interest in doing business in the region among international insurers and reinsurers?

Smith: Latin America continues to show strong potential, especially in countries with low insurance penetration and opportunities for increased sophistication. Despite political and economic challenges, those with a long-term investment view have demonstrated significant profitability in the region. As insurance markets mature and technology evolves, there is immense potential for growth and efficiency gains. In particular, we are advocating for greater use of automation to streamline operations, improve accuracy, and enhance risk management.

BNamericas: In the specific case of Argentina, do you expect this interest to grow as a result of the pro-market reforms that President Javier Milei is implementing?

Smith: We are hopeful that the pro-market reforms will stimulate growth. Argentina’s inflation rate has reduced substantially, and while there is still a long way to go, the initial progress is promising. 

However, the social challenges, particularly the high poverty rate, will need to be addressed alongside economic reforms. In the insurance sector, tightening regulations and promoting M&A could lead to a more efficient and competitive market. We also see a need for technological advancements, especially as inflation slows and financial results require technical efficiency.

BNamericas: How well prepared are Latin American governments and insurers for natural disasters, and how are you working with them in this area?

Smith: Preparation for natural disasters varies across the region, with some countries having more advanced capabilities. A key issue is that insurance penetration remains low in many areas, leading governments to shoulder much of the burden. 

At Pro Global, we have been focusing on automating pre- and post-catastrophe processes, such as bordereaux management and claims processing. We’re also providing support for exposure management, ensuring risks are accurately modeled to enhance response times and reduce the operational strain following catastrophic events. Our Buenos Aires office plays a pivotal role in these efforts by offering scalable claims-processing capabilities during major events.

BNamericas: What kind of work do you engage in with the insurance industry in hurricane-prone countries, and what plans do you have to grow in this area?

Smith: We offer comprehensive pre- and post-catastrophe services to insurance clients, including automating bordereaux processes to ensure swift and accurate responses following a hurricane. In addition, we provide claims validation support and work with reinsurers to expedite claim settlements. For instance, following hurricanes Irma and Maria, we collaborated with UK reinsurers to validate claims and assist with reserve setting. We aim to expand our claims handling services in the region, leveraging our experience to provide real-time support for reinsurers.

BNamericas: Could Latin America’s mining sector become more important for insurers and reinsurers given the region’s abundance of minerals, which are key to the energy transition?

Smith: The demand for insurance coverage will likely grow as industries crucial to the energy transition expand. This could provide new areas of coverage for the insurance and reinsurance industries in Latin America, particularly as alternative energy projects and the public construction sector continue to develop.

We see growing demand in sectors like alternative energy, public infrastructure – especially construction – and agriculture. Additionally, cyber insurance and micro insurance are becoming more relevant as technological sophistication increases across the region. There is a growing recognition of the need for tailored insurance products to meet these emerging demands.

BNamericas: What trends do you see regarding the cost of insurance coverage for businesses in Latin America?

Smith: Given the diversity of the region, it’s difficult to generalize. However, like the rest of the world, Latin America’s insurance market experiences cycles of hardening and softening. Factors such as economic stability, technological advancements, and market consolidation all shape the cost of coverage.