Argo Group seeks stability amidst chaos

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Latin America is notorious for its volatility, with the political and economic situation throughout the region prone to shifting with just a moment’s notice, but that instability can be an advantage, Mark Watson, chief executive of Argo Group, believes. “While others focus on Asia, we’ve put almost all of our energy into Latin America. It’s been an awesome business opportunity over the last decade,” Argo's CEO said of the company's efforts to grow in the emerging markets. “We’ve always tried to go a different direction than our competitors. When you look at our management team, which is very decentralised, we have a pretty good understanding of the region [and] it’s been a really good place for us to experiment. "The economies are changing very much - the middle class is growing. They are a younger generation, and being transparent in business is much more important to this group of business leaders. That’s not necessarily true in other parts of the world, and that’s a really good fit for our company. “A lot of our competitors seem to be moving around their portfolios, and that creates opportunity, and I suspect that will be the case this year as well,” he added. One deal that personified the relative volatility in Latin America was QBE’s recent sale of its operations in Argentina, Brazil, Colombia, Ecuador and Mexico to Zurich for $409m. The move would allow for QBE to focus on what it described as core markets following a $1.25bn annual net loss suffered last year, while Zurich celebrated the deal which would allow it to increase its footprint in key Latin American markets, most notably in Argentina. Other firms have made moves to shift their business in the region to more profitable countries, such as Generali, which sold some or all of its operations in Colombia, Ecuador, Panama, and Guatemala last year, while expressing an interest in expanding its operations in Argentina and Brazil in the first few months of 2018. Elsewhere, Central America's ASSA has made further moves to strengthen its operations in the region with the acquisition of Generali's Panamanian business which came some two years after it had agreed to purchase all of American International Group's businesses in El Salvador, Guatemala, Honduras and Panama. Argo's bid to make further progress in the region saw the firm bring in Jorge Luis Cazar as head of Latin America late last year. That was followed with the formal opening of a new Miami office at the beginning of this year. Much of Argo Group’s presence in Latin America is based in Brazil, where it currently has two offices - one in Rio De Janeiro and another in São Paulo, both which launched in 2011. The largest economy in Latin America is currently going through a period of turmoil, the latest in a series of ongoing political and economic crises in the country. Despite this, it remains the largest insurance market in Latin America, with nearly half of all premiums in the Latin American Market emerging from the country as of last year, with Mexico and Argentina following in a distant second and third with 15.8% and 10.8% of premium market share respectively. For Argo Group, Latin America has been used as an incubator for new products that are developed in the region and then transferred elsewhere. “A lot of the investments that we’re making in technology at a group level, we’ve actually been doing in Latin America [and] Brazil in particular,” Watson said. “We’re doing more product development; more so than we’re doing in the US actually,” he added. One notable example of this is its Protector product which was initially launched in Brazil under the Argo Seguros brand... CLICK HEADLINE TO READ MORE

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