Founded in 1996, Seguros BBVA Bancomer is one of Mexico’s leading insurance companies. Operating mainly as a bank assurance company, it offers 29 products within the fields of health, car, life and damage insurance. Its products are sold through a network of 1800 retail bank branches, in conjunction with call centres and on line services and in 2009 its turnover was $1180m. Its return on sales over the past three years averages 27 percent and return on equity over the same period was sixty percent.

Seguros BBVA Bancomer changed the face of the Mexican insurance market when it was founded. When the Mexican banking sector was denationalised in the early 90s, the business was sold to  VAMSA, a firm that had been long on the banking scene. This company, upon acquiring the bank, realised that there was a huge opportunity for selling insurance products through the bank’s branches. Until then, policies in Mexico had been sold almost exclusively through brokers to people who were earning above average income, as they were the only ones who could afford to pay premiums up-front annually.  VAMSA established Seguros BBVA Bancomer in order to service the middle-income sector, providing a direct debit-style monthly premium payment service to overcome the hurdle of annual payments. In 2000, the firm was sold to the Spanish banking group Grupo Financiero BBVA and has continued to grow. The company has two fully owned subsidiaries; health insurance firm Preventis and car, life and damage insurance claims business Multiasistencia. In addition to these, Seguros Bancomer is also a majority shareholder in Vitamedica, a health insurance claims company. These claims services are fully integrated into the company, with each one reporting directly to the CEO of Seguros BBVA Bancomer, Mr Jose Antonio Palacios.

This fully vertically integrated structure is what makes Seguros BBVA Bancomer unique, as Eduardo Viñolo explains, “we are the only company in the market that is in this position, which puts us at an advantage. We are able to design our own products, sell them through our own bank branches and provide our own claims service.”

The firm also completely overhauled its business model in 2003 to enable it to better respond to the demands of customers. Whereas the original plan was based on simple standardised products sold only through the branch network, the new model has enabled it to diversify and grow, “by 2002, our business strategy was at the point of becoming exhausted, with an expected increase in competition coming from other credit products,” explains Mr Viñolo, “so in 2003 we carried out a product differentiation, looking at market segmentation and distribution channels.” The company has already begun reaping the benefits of this transformation; As of December 2009, of 65 insurance companies in Mexico Seguros BBVA Bancomer is the fifth largest company in Premiums issued, with 6.9 percent total market share. In the bank assurance market, it is the largest player, controlling 41 percent of the market share.

Conversely to what might be expected, the recession has not only left the company’s profits undamaged, it has in fact helped it to grow, “as was the case with the last recession in Mexico, which ended in the early part of the last decade, credit products have been hit hard. With fewer credit cards and loans on offer, we face less competition when selling products through our branches. Managers are seeking to make up for lost earnings in the credit sector by selling more in the way of insurance. Thus in-branch representatives are able to give more time to promoting what we have on offer to their clients.” In addition to this, the call centres used by the firm are handling fewer credit products requests, freeing up capacity to sell insurance. In short, the company has continued to grow and has benefitted from greater public exposure created through a reduction in competition from other banking products.

Outside of the business arena, Seguros BBVA Bancomer has been officially recognised as a socially responsible company by CEMEFI, the Mexican Centre for Philanthropy. There are three areas in which the company has been involved that have led to it receiving this accolade. Firstly, it has an ongoing environmental preservation campaign, which both seeks to raise general awareness and to reduce energy and water consumption in its offices.

Secondly, the firm is helping to create a future-conscious community, using its insurance products to encourage people to think and plan ahead. Thirdly, it works with its own staff to ensure that there is equality amongst employees, encouraging higher levels of integration amongst them through annual tournaments involving whole families. There is also a communication forum where concerns can be raised and discussed on all levels. Finally, the company works with Bancomer’s foundation to promote education, especially amongst the families of Mexican emigrants where the children have been left behind with  relatives.

So what does Mr Viñolo think is the key secret of  Seguros BBVA Bancomer’s success and what are its plans for the future? The sector as a whole offers great scope for expansion, insurance premium contributions only account for 1.9 percent of Mexico’s GDP – when compared to other Latin American countries such as Chile (4 percent), Brazil (3 percent) and Argentina (2.5) it is clear that this is a growth market, “there are some cultural issues that we need to overcome, but really, this is just a matter of  financial education and awareness” says Mr  Viñolo. “As for the key to our success, I would say that as a company, you need to be attuned to the changing market. You need to listen to what your customers say they want and adapt your business model and portfolio accordingly. That is at the heart of our success and the way we will pursue success in the future.”