Local firms Are Community’s first choice
The domestic insurance industry is thriving and Puerto Rican companies are taking their expertise overseas

The Puerto Rican insurance industry made $5.8 billion in premiums in 2002, making it one of the three principal markets in Latin America from the subscriptions side. Moreover, in spite of the presence of some of the world’s largest insurers, such as Aon and Royal Sun Alliance, it is the local companies that dominate.

An impressive 83% of the island’s property and casualty policy holders are served by domestic insurers with native capital. Foreign firms, both American and European, pick up the remaining 17%. In the life sector, the ratio is an even 50-50 split.

FERMÍN M. CONTRERAS GÓMEZ Insurance Commissioner

Insurance Commissioner Fermín Contreras Gómez says the events of 9/11, the war in Iraq, and the general global economic downturn, mean local people are acutely aware of the need for insurance. He says the domestic insurance industry is likely to continue to post healthy gains. The government is eager to support the industry, acting as a promoter as well as a regulator. “I believe the government has a role in creating awareness in the community about the importance of insurance.”

The value of insurance has already been proven in Puerto Rico, helping the island and its people to recover quickly from natural disasters and other unforeseen circumstances. The liberalization of the insurance industry, including the reform of the critical health insurance market, has allowed local firms to flourish, creating a highly competitive market. There are approximately 5,000 insurance agents and brokers in the country. In 2000, a new law was passed to permit banks to participate in the insurance sector, paving the way for greater competition.

Consolidation is on the cards. A number of key mergers took place in the sector during 2002. There are predicted to be more.

Despite the density of insurance providers, and the high take up among consumers, Mr. Gómez believes that there is still room for growth both for individual insurance and commercial policies. “There are a lot of pharmaceutical companies, banks and manufacturers doing business in Puerto Rico, as well as small- and medium-size local businesses. All of them need insurance.”

One of the most important local companies is Triple-S, whose roots date back to health cover but which has since successfully diversified. Established in 1959 as a health insurance company by local doctors and dentists, it was restructured in 1999, moving into property, life and casualty insurance. In 2002, it began moving into financial services, offering a wider choice of products to its large customer base.

RAMÓN M. RUÍZ President & CEO of Triple-S Management Corporation

Ramon Ruíz (INTERVIEW), President and CEO of Triple-S Management Corporation, the group holding company, explains how the enterprise has carved out its leadership position. He says that service is the group’s trademark. “We want to serve. We want to provide the best service to our people.”

There is strong customer loyalty. The Triple-S health insurance account with the federal government, which started in 1960, says it all. Although employees now have other healthcare options, 98% of employees have stayed with Triple-S.

Innovation, including trying to find new ways to deliver health insurance to those minorities that fall outside the various government and private schemes, also sets Triple-S apart from the rest. “More than 90% of our population have healthcare insurance, private or with the government program,” says Mr. Ruíz. “That means that 10% might be uninsured. There is an opportunity to serve that 10% of uninsured people if we have something affordable and accessible for them.”

TRIPLE-S Business Areas in millions of dollars

Triple-S is eager to expand abroad. The company has big plans for the U.S. market where it has already made in-roads. “Not many people know that we started providing phone consultation services in Spanish for the Hispanic community in the state of Oregon this year. This service is called Tele-Consulta.”

In the same call center, the company is also covering the overflow calls to English speakers. It has fully bilingual registered nurses to help answer calls. There are plans to roll out the service to other parts of the country.
But Mr. Ruíz says he does not just want to make up the numbers. “Many companies from Puerto Rico go to the U.S. to have a presence there. I don’t want to be in America just for that reason. We want to be there, and be different.”

The experience of Triple-S over the last four decades can be put to use across the region. The liberalization of the Puerto Rico healthcare market gives it a definite edge. Mr. Ruíz says the company is evaluating opportunities in places such as Costa Rica and the Dominican Republic. “The experience we have gained in the reform business is something we can use in many Latin American countries. In many of these countries the government provides health insurance.”

SOCORRO RIVAS President & CEO of Triple-S

The company has also invested heavily in technology to improve its efficiency in serving customers. Mrs. Socorro Rivas (INTERVIEW), President and CEO of Triple-S, says the company maintains a strong technological edge over its rivals. She says the Triple-S administration cost for claims is among the lowest anywhere. “We process thousands and thousands of health claims without human intervention at all. We send the payments to the provider’s bank, and we send an electronic explanation of payments.”

Mrs. Vivian López, Vice President for Public Relations, says that Triple-S wants to communicate its experiences to help other institutions with information and support to meet the challenges of the modern health insurance industry. She says the company shares its knowledge with Puerto Rican organizations such as the university and the Department of Health. “We have a motto – we share what we have.”