InsTech London's Henry Gale talks to Dario Luna, co-founder and president of Súper, about trends in Latin American insurance markets, Súper’s digital insurance products and corporate-insurtech partnerships.
Henry: What does your role as the president of Súper involve?
Dario: I take care of strategy, spotting market trends and building relationships with insurers, reinsurers and potential partners for distribution or new products. I am also involved in product development.
Henry: What was your motivation for founding Súper?
Dario: Súper was conceived in the summer of 2019. Sebastian Villarreal, Marco Ahedo and I had talked about the need for simple, useful and understandable insurance products in Mexico and Latin America, and how technology can enable that.
Sebastian had built up fintech companies in the US and wanted to come to Mexico to start the company, so we set it up. Our approach was not to digitise existing insurance products but to push the frontier and think about what the right products are for the next generation.
Henry: What products does Súper offer?
Dario: Our first product was a parametric earthquake product for Mexico City. It took us nine months from creating the company to selling our first policy at the beginning of the COVID-19 pandemic. It is an insurance policy triggered by modelled intensity, with low sums insured.
Initially, it was geared towards those in Mexico City aware of earthquake risk who either do not have home insurance or want to increase their protection for deductibles or exclusions. We are now offering the product nationwide.
In September 2020, we started offering life plus COVID-19 hospitalisation cover. In Mexico, over 50% of all health care expenditure is out of pocket. We wanted to give protection against this pandemic for those that did not have insurance or relied on the social insurance system in Mexico.
Three months ago, we started selling two simple life products. One is term life insurance, with low subscription requirements. The other is life insurance with implicit returns, five to twenty years. Premiums are returned to the policyholder at the end of the policy period. There are more products in the pipeline.
Henry: Have you paid out any claims?
Dario: Our parametric product was triggered by the earthquake near Acapulco on September 7th. These are thrilling times for us as this event constitutes an opportunity to validate the model, learn from our use case strategy and share its confirmed benefits among our client base and future clients.
Henry: Why has Súper chosen to offer parametric insurance?
Dario: For our clients, it does not matter if you call it parametric; they will focus on the features. Parametric lends itself to solve some of the main frictions of current insurance products, especially catastrophe products. Additionally, some of our backgrounds are from the parametric insurance and reinsurance world.
In Mexico City in 2017, only 50% of the claims had been settled 18 months after the earthquakes occurred. Customers want to be paid in days, not years. Our approach is to take specific features that we think consumers want, test their appeal and build a product or work with a partner to bring those features into the market.
We see parametric as a slowly evolving market in terms of take-up because it tends to be a single cover. We will continue to build on parametric slowly but as part of our general view to build simple products with simple features from the perspective of our clients.
Henry: Who are Súper’s customers?
Dario: Our customers live in urban areas of Mexico, between 25 and 45 years old. They are newly banked and digitised; they use digital payments and buy from their smartphones.
They are underinsured, because they rely either on the imperfect social insurance system or their employer’s insurance offer. Depending on the product, between 50% and 80% of our customers have never purchased insurance before, for that particular cover or in general.
Henry: What insurance partners is Súper working with?
Dario: Súper was the first company to use the MGA (managing general agent) model for regular insurance products in Mexico.
We are working with a couple of Mexican insurers, Seguros Atlas and General de Seguros. They want to partner with insurtechs like us to digitise, improve their product offer and get to know more clients. We also partner with Munich Re for parametric products.
Henry: What new products is Súper expanding into?
Dario: We are working with Seguros Atlas and Swiss Re to bring to market a home contents policy. If you ride a bike to work, carry a laptop and phone, and something happens like an accident or theft, you need protection.
We are also working with Seguros Atlas and Munich Re on parametric hurricane coverage. We also have an established relationship with ERN, an catastrophe modelling agency based in Mexico. We are developing a modelled intensity parametric hurricane product that will come out next year.
We are also looking to complement our offering with health products.
Henry: What are the biggest opportunities and challenges in the Mexican insurance market?
Dario: There are millions of people in Mexico that want to buy insurance but do not get the chance to do it. Either people are not being offered the right products at the right time or the products are not being explained well enough. Like any other market in the world, people tend to defer the decision to buy insurance.
The biggest challenge is how to bring the right product to market. We are choosing perils that are immediate and well understood. People in Mexico are aware of natural catastrophes, theft, accidents and death. Mexicans are very culturally attuned to death.
The other main challenge and opportunity is to build technology to change the way people consume insurance.
Henry: What trends do you see in Latin America more widely?
Dario: There has been a boom in Latin American fintechs reaching unicorn level, and some are starting to look at insurance as part of their service. There is a focus on financial services, but also the gig economy. It will be interesting to follow.
Latin American consumers want a full one-stop shop. There is a reason why gig economy platforms Rappi and Cornershop are in Latin America, because they offer several products and services to the consumer. At Súper we also sell a wide range of products.
Henry: What benefits do you see in corporate-insurtech partnerships?
Dario: Globally, digitally based corporates are looking to improve their value proposition by offering insurance products at the right time in a customer’s journey: before, during or after the purchase. We see that also here in Mexico.
Súper is exploring those partnerships because our technology stack lends to it, effectively integrating underwriting and claims.
Henry: Why did Súper join InsTech London as a corporate member?
Dario: We have been following InsTech London since the beginning and have been attune with the topics that the community is raising. Exchanging experiences and knowledge and spotting trends early like InsTech does will be crucial for the insurance market in the coming years.
We also want to bring views from our own region that complement what InsTech London is doing, and we want to get to know more companies that you talk to.
Henry: What kind of companies would you like to connect with?
Dario: We would love to hear more on how to simplify insurance through parametric modelling or parametric underwriting. Understanding others’ experiences of data analytics and successful integrations in digital customer journeys.
Súper is enthusiastic and open to talk to companies that are innovating. We are very happy to talk to insurers. There are companies like us in other parts of the world trying to change their insurance markets, and we would love to connect.
For more information on Súper, go to super.mx