Landing in Local Markets 20th February 2019Although I’ve worked in the International Property market for 18 years, this was my first trip to Mexico City. With a Latin American hub, we’ve been gaining an insight to the local market environment from our colleagues, but there is nothing that compares to actually making that personal overseas visit.Attending meetings with local carriers, brokers and insurance/risk managers to discuss the reality of life in LatAm, rather than just preconceived perceptions, was invaluable. Everyone I met shared their vast experience, uncovering information that I simply wouldn’t have been able to fully appreciate without travelling to Mexico.A common topic of conversation surrounded the uncertainty the new government is having in terms of direction and impact heading towards 2019 – for example, the potential scenario of government agencies activating automatic period extensions under the procurement law ahead of 31/12 and 1/1 renewals.The whole meaning of our tag-line – ‘bringing the Lloyd’s market to you’ – is to enable local markets, such as Latin America, access to capacity they otherwise wouldn’t. At Probitas we have focused on drawing in business that hasn’t been previously placed into the Lloyd’s market.LatAm based business that we typically see coming into the London market tends to be large placements where there is a need for global capacity to be accessed, ‘distressed’ business where the local market might not have an appetite to participate, or where they have a desire to seek reinsurance protection, and, of course, heavy natural catastrophe exposed business, such as beachfront hotels.Our LatAm hub, however, are seeking the more ‘vanilla’ SME risks, that has historically been retained within the local market. It was really interesting for me to work alongside Roberto and his team to see the contrast in the risks they are reviewing compared to the business we tend to see in London.Our Mexican colleagues sees a vast amount more of the ‘Class A’ business that is traded locally and has a less volatile risk profile. Naturally, at times, there is some cross-over in the submissions we see in London and Mexico, but with the close dialogue and relationship we have formed with our counterparts in Mexico City, this can only be perceived as a positive – deploying capital where it makes most sense to Probitas, whilst adding client value at the same time.When we first started to write business in LatAm, in 2015, we launched our TradeWinds online solution which enabled local brokers to access us with target ‘Class A business’ directly – that type of business that we wouldn’t otherwise see in London. Tradewinds was certainly a great solution for us in the short term, bridging that distrubition and communication gap between London and ‘local’ LatAm. I believe it helped put Probitas on the map, but there is no comparison of the added benefits we now enjoy in having our own local presence helping to build our network and brand for the future.Whilst our Mexico City hub opened in January 2018, the team haven’t really had a full year of trading yet. In late January 2018, they were in London getting to know the syndicate personnel, systems and business model. The team have made a steady start and, combined with our long-term strategy, are focused on our underwriting strategies.During my visit, it was really useful to discuss some individual risks in more detail, allowing us to get a clearer understanding of our own interpretations of the underwriting strategies we have deployed over the past year. The insight we shared, I believe, only benefits the brokers and insured as it enables us to add an extra level to our underwriting offering and capabilities. One thing is clear to me, whether you are in London or in Mexico, that even in this modern age of advanced technology, you simply cannot replace those face-to-face trading relationships which make the insurance industry so unique and personal!Travel has always been a large part of our plans at Probitas and it will continue to be essential to our underwriting strategies as we move forward. I learned a lot from my short time in Mexico City, providing a much clearer insight to the nuances of the local market, and I’m already looking forward to my next trip!