DON’T BE DECEIVED by the Panama Papers. The explosive files, which were leaked in 2016, detailed financial corruption connected to a law firm in Panama. But advisors in the Central American nation believe they created an unjust characterization of a financial industry that’s positioned for significant growth in the near future.
“An unfair image of corruption has been created by a law firm,” said Douglas Enrique Gomez, AFP, LUTCF, a seven-year MDRT member from David. “Panama has been one of the countries in which the regulatory and protection standards against money laundering and terrorist financing have been fully implemented, both in the banking system and in the insurance industry. The vast majority of people who are dedicated to financial and insurance advice do so in an honest way.”
Jovani Mora Valenti Sr., AIAA, agrees.
“Our insurance legislation is very robust, and our regulatory body plays an extremely important supervisory role,” the four-year MDRT member from Panama City said.
Insurance companies in Panama, of which there are 23 national and international entities, are overseen by the Superintendence of Insurance and Reinsurance. In recent years, the types of insurance available have expanded significantly.
“Our insurance industry is very diversified compared to the rest of the countries of Central America,” Mora Valenti said.
In his 30 years in the insurance industry, Arnolfo La Vitola, a seven-year MDRT member from Panama City, has noticed a change in the culture of life insurance acquisition as well.
“In the past, insurance was acquired to cover a pressing need for protection,” he said. “Today, the population has grown in terms of knowledge in life insurance. What used to be only to acquire protection is now offered as a savings plan, to deduct taxes, for children’s education, for collateral on a line of credit, as an inheritance plan or as protection.”
“Every day, Panamanians are more aware of insurance and its proper use,” Gomez said. “I believe the changes that could occur in the coming years would be those related to a greater penetration of insurance products in the most vulnerable segments and of lower purchasing power through easy-to-acquire micro insurance.”
Gomez has a unique method of educating the public: He is the director of “¡Seguros y Más!,” a radio program focused on the importance of insurance and converting the technical terms of the industry into easy-to-understand language. The program examines all different types of insurance, as well as insurance law, consumer rights and responsibilities, and insurance broker duties.
“¡Seguros y Más!” was also a response to Panama’s economic downturn in 2018. Although the country has one of the fastest-growing economies in the region, political fluctuations and the global financial crisis have taken their toll, forcing advisors to come up with better and different ways to do business.
Every day, Panamanians are more aware of insurance and its proper use. I believe the changes that could occur in the coming years would be those related to a greater penetration of insurance products in the most vulnerable segments and of lower purchasing power through easy-to-acquire micro insurance.
— Douglas Enrique Gomez
“We had to be more creative,” Gomez said. “I have had to double my prospecting activity, look for other niche markets and increase cross-selling efforts with my own portfolio.”
The economy also had an impact on La Vitola, who supervises 150 agents and brokers in his role as associate director of Pan American Life of Panama.
“In the last year, the economic slowdown had an impact,” he said. “I had to reinvent myself and use a lot of creativity to seek out new market niches, both at the agent and client level. My initial strategy to overcome the challenges was to carry out a review of each agent’s portfolio to increase, change plans or add benefits to the plans their clients have.”
La Vitola also encourages his agents to engage in cross-selling. Since health insurance has recently seen a large amount of growth, he has used that as a foray into life insurance.
“Our culture gives priority to the health sector,” he said. “The way to take advantage of this situation was to carry out a health and life cross-selling strategy and thus achieve the awareness of important clients to take a life policy as a complement to their health insurance.”
Similarly, Mora Valenti regularly reviews any insurance policies that are more than five years old.
“Recycling the portfolio in a difficult economic situation is vital because it provides you with a new premium and creates client loyalty,” he said. “We have had very positive results in retention while maintaining a fresh image, allowing our firm to take advantage of appropriate technological tools to adapt to the changes that are coming.”
Indeed, Mora Valenti sees the ability to adjust as vital for Panama as it faces governmental transition, economic fluctuations and even unforeseen challenges — such as last decade’s frustrating Panama Papers, which impacted the country’s reputation and worldwide image.
“You have to adapt to the changes quickly,” he said.