Risk Insider: Matthew Nielsen

Latin America’s Insurance Industry Advances

By: | June 6, 2016 • 2 min read
Matthew Nielsen, a meteorologist and geographer with a great deal of experience in climate hazard models, is Senior Director, Global Governmental and Regulatory Affairs at RMS. He can be reached at [email protected]

Over 600 million people call Latin America “home,” with hundreds of thousands lifting themselves out of poverty and into the middle class each year.

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But how many of those citizens or businesses are prepared for a major catastrophe, such as the earthquake that struck Ecuador on April 16? How many of them are thinking about catastrophic floods, such as those experienced in Paraguay and neighboring countries in 2015?

And if they have insurance, are the insurance markets in each country prepared to handle a financial disaster?

While these questions are difficult to answer with any certainty, it is comforting to know that the region is in the process of understanding the implications of future events. Countries from Costa Rica to Chile are beefing up their review of solvency standards for companies operating in their insurance markets, and companies are stepping up to the challenge.

While economic growth has slowed in Latin America in recent months and political turmoil has begun sprouting up in countries like Brazil, the future prospects for the region are as bright as ever.

Insurance regulators, such as those operating in Mexico, Colombia and Peru, for example, are implementing more comprehensive reviews for insurance companies.

In Mexico, implementation of Solvency II is ongoing, with the first two pillars (corporate governance and reporting) said to be already in place. Colombia recently initiated a process to review and approve earthquake catastrophe models for use by primary insurers. Peru has already put such a process in place.

Models are at the heart of this leap in sophistication. Some countries are setting up review processes for external models, similar to the requirements set forth in the first pillar of Solvency II.

Countries like Colombia and Peru developed interrogatories for reviewing these external models, hiring experts in the fields of seismology, engineering and actuarial science to review submissions.

Other countries, like Costa Rica, are investing in building their own models to help them understand their catastrophe exposure, a lengthy and costly endeavor.

In some cases, the increased insight into insurance industry risk brings to light vulnerabilities in the local markets. Costa Rica, for example, only recently privatized its insurance market.

Another vulnerability is the lack of insurance penetration. In Costa Rica, like much of Latin America, insurance is limited to commercial, industrial and high value residential risks. When it comes to protecting houses of working-class families, however, recent efforts fall short.

While companies are beginning to increase their market share and expand insurance penetration, regulators believe that the market won’t be able to help the country recover from a major natural disaster.

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While economic growth slowed in Latin America in recent months and political turmoil bedevils countries like Brazil, the future prospects for the region are as bright as ever.

Businesses will continue to grow and invest, and home ownership will continue to rise. As the region grows, so too will the need to protect the assets accrued during this economic expansion.

Insurance is crucial to the resilience of Latin America, and a healthy insurance market will ensure that the region will continue to grow and prosper, despite the threat of natural disasters.

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession

Maila Aganon is the personification of the American dream. The vice president of treasury and risk for Caesars Entertainment Corp. immigrated from the Philippines and worked her way to the top.
By: | October 12, 2017 • 4 min read


R&I: What was your first job?

I actually had three first jobs at the same time at the age of 16. I worked as a cashier in a fast-food restaurant, a bank teller and a debt collector for an immigration law firm.

R&I: Who is your mentor and why?

I have a few. The first one would be the first risk manager I reported to. He taught me the technical part of the job, risk financing, captives and insurance. I am also privileged to be mentored by Lori Goltermann (CEO of U.S. Retail for Aon Risk Solutions).  From her I learned to be resilient and optimize life/work balance. Then of course I also have a circle of ladies at work who I lean in to!

R&I: How did you come to work in this industry?

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I was once a bank teller and had a client who was an insurance agent. He would come in every day to make deposits. One day, he offered me a job. He said, “How would you like to have your own desk, your own phone and your own computer?” And I said, “When do I start?” I worked for this personal lines insurance company for six years.

R&I: Did you take to it immediately?

Yes, I did sales, claims and insurance accounting. I left for a couple years and that is when AAA came calling, which was my first introduction to risk management. I didn’t know there was such a thing as commercial insurance. They called me and the pitch was “how would you like to run a captive insurance company?”

R&I: What have you accomplished that you are proudest of?

It is not so much the job but I say that I am the true product of the American Dream. I came to the U.S. when I was 16. I worked three jobs because I didn’t want to go to high school (She’d already graduated high school in the Philippines.) I spoke very little English, and due to hard work, grit and a great smile I’m now here working with all of you!

R&I: What is your favorite book or movie?

In movies, it is a toss-up between Gone with the Wind and Big Daddy.

R&I: What is your favorite drink?

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I like anything sweet. If you liquify a dessert that’s my perfect drink.

R&I: What is the most unusual/interesting place you have ever visited?

This is easy because I just got back from Barcelona on a side trip. I visited the Montserrat Monastery, which is a thousand-year old monastery. It was raining and foggy. I hiked for three hours and I didn’t see a single soul. It was a very peaceful place.

R&I: What is the riskiest activity you ever engaged in?

This is going back to working at a fast food chain when I was young. I worked in a very undesirable location in San Francisco. At 16 I used to negotiate with gang members so they wouldn’t rob me during my shift. I had to give them chicken so they wouldn’t rob me.

Maila Aganon, VP, Treasury and Risk, Caesars Entertainment Corp.

R&I: If the world has a modern hero, who is it and why? 

I can’t say me. They have to be my kids Kyle and Hailey. They can make me laugh and cry within a half-minute of each other. Kyle is 10, a perfect Mama’s boy. Hailey is seven going on 18.

R&I: What about this work do you find the most fulfilling or rewarding?

I think the most fulfilling part is how you build relationships with people and then after a while they become your friends.

R&I: What is the risk management community doing right?

Risk managers do a great job of networking. They are number one. Which is not a surprise because the pillar of our work is building a relationship with underwriters, clients and brokers.

R&I: What could the risk management community be doing a better job of? 

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I am experiencing that right now; talent.  We need to a better job in attracting and retaining talent. Nobody knows about what we do. You tell someone ‘I’m as risk manager’ and they give you a blank look. What does that mean?

We’re great marketers and we should use this skill set in attracting talent. We should engage our universities, our communities, even our yoga groups and talk to them about the exciting world of risk. It is an exciting career because there is nothing like it.

R&I: What emerging commercial risk most concerns you? 

It would have to be the increasing cyber risk and the interdependency of systems.

R&I: What does your family think you do? 

I took my seven year old daughter once to an insurance event that had live music, dancing and drinks. She thinks that whenever I go to an insurance meeting, I’m heading to a party.




Katie Siegel is an associate editor at Risk & Insurance®. She can be reached at [email protected]