In the fast lane
The motor insurance company Metropolitana has been part of the Talanx Group since 2011. This former competitor is now well integrated into HDI Seguros in Mexico. The two entities have together become a powerful company.
It’s Monday morning in Guadalajara. Rush hour has just begun in this metropolis with a population of 1.5 million inhabitants when Aldo Ramírez’s smartphone shows a new message: “Collision on Avenida Vallarta. No one injured.” The 40-year-old accident investigator at HDI Seguros Mexico abandons his coffee and jumps into his car. 20 minutes later he reaches the scene of the accident, and first of all makes sure that there are definitely no casualties. Then he begins documenting the collision in detail. What happened? What damage has been caused? And most importantly, who is to blame? Aldo Ramírez talks to those involved and inspects and photographs the damaged vehicles. He is unruffled by the commuter traffic pushing past him on the six-lane Avenida Vallarta thoroughfare with horns blaring.
14 experts are on the road for HDI Seguros in Guadalajara alone, five of them with motorbikes. Often this is the only way the experts can squeeze through the dense traffic and reach the scene of a crash “within 30 minutes”. A promise that HDI Seguros can keep, with over 300 surveyors in Mexico’s 35 largest cities. In rural areas, the car insurer can make use of independent accident investigators, who can reach the scene of an accident within 90 minutes.
It’s an important network. Unlike what we are used to in Germany, the police in Mexico do not always attend the scene of a crash to establish who is to blame. If there is any damage to cars, this falls to the insurance companies’ inspectors. Only if it cannot be established with certainty who is to blame will police officers come out. Furthermore, only 28% of the approximately 35 million cars in the country are insured, so many drivers prefer to overlook minor dents. Their tendency to also ignore more serious damage that they have caused makes the use of accident investigators vital. These are difficult conditions for motor insurers to operate in.
“Under these circumstances, it was important for us to grow as a company,” says Juan Carlos Suárez. The CEO of HDI Seguros, based in León, Mexico, two and a half hours east of Guadalajara, looks back proudly on a successful coup: in 2011, Talanx International AG acquired “Metropolitana” and merged it with its subsidiary HDI Seguros. The two companies together became the country’s tenth-largest car insurance provider. Having previously insured 200,000 vehicles, HDI Seguros now insures 480,000, while the number of employees has doubled to arround 900 nationwide. “But growth isn’t an end in itself,” says Suárez. He explains that the acquisition was necessary to improve service and thus strengthen the company’s position in the market.
»We held long discussions about corporate culture and financial targets before the takeover. It was important that we were compatible.« SAYS SUÁREZ
This morning in Guadalajara, it becomes clear what Juan Carlos Suárez means. The driver responsible for the accident on Avenida Vallarta is a customer of HDI Seguros. He stopped paying attention for a moment and, in the dense commuter traffic, crashed into the back of the car in front. At first glance only the cars’ bumpers appear to be dented, but Aldo Ramírez, a trained car mechanic, soon notices that the crash has also damaged the air conditioning system. He has the car towed to the nearest “Auto Pronto”, a car repair shop that works exclusively for HDI Seguros. The group already has ten of these authorised repair shops in Mexico, and a further ten are to be added by the end of 2014.
“Three-quarters of all repairs will then be carried out in an Auto Pronto”, says CEO Suárez. He highlights that this service is important, as not every repair shop in Mexico does a good job. HDI Seguros also expects its partnership with the repair shops to cut repair costs by 20%. The service has become possible because HDI Seguros has been able to supply a growing number of “Auto Prontos” with repair orders since the merger. The insurer is working on building up a network of independent repair shops in rural areas, so that it can also guarantee the quality and speed of repairs in these regions. “Service is our top priority,” Suárez says.
Increasing market share to improve service: this sounds simple, but a lot of thought is going into the plan’s implementation. “We didn’t just purchase a company at random,” Juan Carlos Suárez explains. “We held long discussions about corporate culture and financial targets before the takeover. It was important that we were compatible.” This is not something that can be taken for granted. After all, a family business from Mexico City had to be merged with a Talanx subsidiary based in León. “With two companies as different as these, you can’t just buy new door plates,” Juan Carlos Suárez says. His strategy is to talk to each other, listen to each other and respond quickly if any confusion arises. “Many employees were afraid that the merger would lead to redundancies,” says Suárez. “But we were able to allay these fears.” In addition, many former Metropolitana employees who had to relocate to León, 400 kilometres to the north-west, were not keen at first. Very few people voluntarily leave the vibrant megacity. “But if you live in León, you’ll quickly start to see the advantages,” says Suárez. In contrast to Mexico City, León has only 1.6 million inhabitants, which means shorter distances, more relaxed traffic, a lot of green; in short, an environment worth living. Suárez admits that the capital has more to offer, but points out that it is difficult to enjoy much of it, as the distances are so great.
“Our people are proud to be part of the HDI family,” SAYS SUÁREZ
The most important thing, he explains, was that the companies were in agreement on the key points from the beginning. “We both want to be a fair employer.” The company helped employees who had to relocate to León with their search for accommodation, schools, nursery schools and with moving house. All new employees received training to prepare them for changes in working procedures.
A look at the company’s head office in León shows that HDI Seguros has succeeded in securing the loyalty of its employees. Newer and more junior employees sit alongside many experienced colleagues who have been with the company for more than ten years; one of whom will soon be celebrating his 35th anniversary. For HDI Seguros, success goes hand in hand with involvement in the community. For example, the company finances courses in “road safety” at schools and universities. And, on Epiphany, all employees collect toys for an orphanage. “Our people are proud to be part of the HDI family,” according to Juan Carlos Suárez.
The car that was involved in the accident on Avenida Vallarta has now arrived at the Guadalajara branch of Auto Pronto. The mechanics estimate that it will take no more than five days to repair the air conditioning system. In Mexico, where there is a chronic shortage of spare parts, this could be a new record. “Our repair shops get parts delivered relatively quickly,” says accident investigator Aldo Ramírez. About half of around 120,000 insurance claims processed by HDI Seguros each year result in repairs at the repair shop. These figures help tighten relationships with suppliers, which has a positive effect on delivery speeds.
“But that’s in no way the only advantage of the merger,” says Juan Carlos Suárez. HDI Seguros expects a better and faster service. In particular, the company has been able to strengthen its position through synergies. The acquisition of Metropolitana has opened up new areas of business to HDI Seguros, such as a partnership with around 40 authorised dealers in Mexico City and the provision of insurance for VW’s entire leasing fleet. The move promises new opportunities on a market that is only beginning to recover from the crisis. The number of new cars sold each year has remained constant for years at one million.
A RELIABLE PARTNER
Ten Auto Pronto authorised repair shops work exclusively for HDI Seguros Mexico, and a further ten will be added by the end of 2014. The cooperation offers many advantages, such as quick delivery of spare parts, professional work and lower repair costs: The advantages of cooperation are manifold.
It’s evening when Aldo Ramírez returns to his office. He has visited the scenes of five accidents and processed five cases. The crash on Avenida Vallarta was followed by four more accidents, each of which involved up to three vehicles. Aldo Ramírez opens the door to his office. His full coffee cup from that morning is still where he left it. It’s just a normal day in Guadalajara.
HDI Seguros Mexico – more than motor insurance
Talanx has expanded its business in Latin America in recent years through a series of acquisitions. Besides Mexico, the Group now has subsidiaries representing it in Brazil, Chile, Argentina and Uruguay, drawing on the experience of established local companies in each case. It entered the Mexican market in 2009 by acquiring “Genworth Seguros” (previously “Seguros del Centro”), – later HDI Seguros, an insurance company founded in 1943.
Following the latest merger it might seem that HDI Seguros Mexico is all about motor insurance, but the León-based company also offers a range of other types of insurance, including accident insurance. The “Seguro Casa-Habitación” protects families against all main risks, whether fire or flooding. The “Seguros Empresariales” offers companies individually tailored solutions covering all damage that can adversely affect business. “Seguro de Accidentes Escolares” covers all accidents that can occur on the way to school, at school or at school events. This insurance includes protection for pupils, teachers and administrative staff.