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19 junio 2024

Juan Ignacio Solano: “At MGS Seguros we have incorporated artificial intelligence tools for product design and pricing”

Juan Ignacio Solano (Tudela, 1971), is, since January 2024, the director of the Broker Channel of MGS Seguros. With a degree in Economics and Business Administration from the University of Zaragoza, Solano has 25 years of experience in the insurance company, first as a commercial inspector in Zaragoza and later as branch manager in La Rioja and Zaragoza. Since 2006, Juan Ignacio Solano has been territorial director of MGS, first of the Meseta Sur area and later of Zaragoza.

What are the challenges you are facing as head of the MGS Insurance Broker Channel for the whole of Spain?

MGS has always been committed to traditional mediation, that is to say, exclusive channel and broker channel. Although historically it has been a company very focused on sales through exclusive agents, it has not stopped promoting the broker channel, which represents around 25% of the commercial activity of the company. What we are currently trying to do at MGS is to offer the broker channel the exclusivity it does not have today, by creating its own Territorial Area (the management of which I am taking over), with a technical and underwriting department, branches, etc.

The MGS broker channel represents around 25% of the commercial activity of the company. What is its role within MGS Seguros in Spain and what are its objectives?

We want to grow in an orderly and profitable way. The sector is in good health (in this first quarter it has already grown by 12%), and so is MGS. But it is true that this is a sector whose growth in itself is neither good nor bad; we depend on the claims ratio, which is what determines the profitability of the companies: you can grow a lot, but if your claims ratio is bad, you run out of margin. What we want within the MGS broker channel is to grow in a controlled manner so that we can maintain long-term partnerships that are beneficial for all parties.

The broker channel business is experiencing an increase in recent years. What are the causes of this phenomenon?

The broker plays a very important role in the insurance industry. He or she is an independent mediator who offers professional and impartial advice to clients. The broker, depending on the client’s needs, advises them on one product from one company or another. This versatility, together with the growth and capillarity of the channel, has led to an increase in brokered premiums.

In June 2023, MGS Seguros announced a profit of 19 million euros in 2022, 3.4% more than in the previous year. Do you already know the figures for 2023?

We do not have them yet; they will be officially published at the next general meeting in June. In view of the stable management that is part of the Entity’s policy, they are likely to be similar to or better than those of the previous year.

In what types of insurance is the broker’s figure most relevant?

The broker channel is very strong in the sale of mass products, those with a very massive sale. Automobile insurance is compulsory, it is sold in a very recurrent, very easy way, and it is very price-sensitive. Customers can switch and vary from one company to another depending on price.

THE BROKER CHANNEL IS VERY STRONG IN PRODUCTS THAT HAVE A VERY MASSIVE SALE.

Also in home insurance. That’s where the broker channel is having more volume of new production.

Historically, the broker channel is also the channel par excellence where the SME and liability product has sold the most, especially for industry. But it is not a product that is sold massively now. For the last three or four years it has been a very complicated line of business. There are certain types of industrial risks that have not been very profitable and, therefore, reinsurance companies, which are the ones that provide support to the companies to face these types of risks, have become much stricter when it comes to placing these types of risks.

The rapid evolution of society in the last quarter century, with the incorporation of digital technologies such as Artificial Intelligence, in what way does it influence the offer of insurance companies and, in particular, MGS Seguros?

It has a major impact. The insurance sector, and not only MGS, is in very good health and is very committed to innovation. At MGS, we are incorporating tools that use artificial intelligence in most of our products, both in the product contracting process and for pricing. And in all phases of the process, from assessing the type of risk, to calculating a price based on the population, the zip code, through the loss frequencies of that particular area, or even by the type of vehicle model involved.

Has this use of artificial intelligence been a before and after for insurers?

In the areas I have mentioned, it is a step forward in the sophistication of the systems that have been used in recent years to adjust as much as possible to the reality of each risk to be insured.

Do they help companies to be more competitive?

Yes, the lower the loss ratio we have for each product, the more competitive we can be for the broker and the client. In the case of good risk profiles, we can lower the price and this benefits both the client and the broker.

You have been with MGS Seguros for 25 years, first as commercial inspector in Zaragoza and then as branch director in La Rioja and Zaragoza, as Territorial director in Castilla la Mancha, Extremadura and Zaragoza and now as director of the Broker Channel for all Spain. How have you experienced the evolution of the company in this last quarter of a century?

I remember in my beginnings that we used to rate in a quite manual way and we had some tables to calculate prices. Later, some programs were incorporated to make this calculation much more automatic. Then came the era of e-mail, and from there we moved on to price calculators, which were very advanced. Even so, we still had to print the policy for the client to sign and return it to us. And from there we have moved on to being able to issue a policy in real time anywhere, not only in Spain, but in the world, to a customer, send it to him by e-mail and sign it digitally. We have systems that give us data a day ahead and we can issue a policy or report a claim without the customer having to come physically to a branch office; the customer can do it from a telephone, from an Internet platform or from the application.

Juan solna MGS

What procedures can be carried out with the MGS Seguros application?

All kinds of procedures with the company. And, in addition, clients have their mediator, who can be an exclusive agent or a broker, to whom they can call for any consultation, to report a claim, for information on the claim or to request a price.

The aging of the population, the uncertainty of the markets, digitalization or sustainability are part of the challenges faced by insurers such as MGS Seguros. How does the company face the changing challenges faced by individuals and companies today?

The insurance sector, and therefore MGS, is also affected by economic cycles. However, it is true that it is a refuge sector, due to the fact that certain types of insurance are compulsory. When the economic cycles are upward, so is the sector, the only thing we must always keep an eye on is the loss ratio, so that the margins are adequate. And when the economic cycle goes down, the sector is also closely linked to that downturn. If companies bill less, we also bill less. We are increasingly aware of our customers’ needs and the challenges we must overcome to provide them with a quality and close service.

MGS CYBERSECURITY PROTECTS COMPANIES AND THE SELF-EMPLOYED AGAINST CYBER-ATTACKS.

The aging of the population is also a reality, although it has not yet translated into an economic result within the sector. It can have an impact on certain types of products, for example, in health, as premiums and rates increase in line with age brackets.

Does this also translate into the launching of specific insurance products as the population’s circumstances change?

Yes, we are adapting to all the sensitivities and needs that the market throws at us, as for example we have recently launched a personal mobility product very focused on scooters and bicycles, in response to a reality of our current society. It is a third party accident insurance with civil liability. An area that is still not very regulated, but whether or not the regulation comes or not, we have to provide a solution to our customers.

Or very new products, such as cybersecurity, for example. In the past, criminals used to rob banks, but now incidents occur directly through the network: they can make an incredible embezzlement, or even hijack systems, paralyzing business activity from one day to the next, from one second to the next. This is a risk that we did not have 25 years ago. The question now is not if you are going to have a cyberattack, but when you are going to have it. Our product is called MGS Ciberseguridad (MGS Cybersecurity), aimed at covering needs at the company or self-employed level, to protect against a cyberattack that threatens the continuity of the business. Whether it is compensation, or professionals who need to solve the problem and reactivate all the systems again, or at a legal level, or at a consulting level…

In addition, I think it is also important to emphasize that we also work on the preventive side: we install a product in the client’s systems to prevent the cyber-attack and we monitor them. It is within the reach of any self-employed person or SME, even with aid from the Next Generation European funds that are financing the purchase of this type of product.

What does MGS Canal Corredor offer in this regard?

What differentiates the MGS Canal Corredor from the rest is, and this is our objective, to try to provide tailor-made solutions. Whether the client is a business client or an individual client, we will try to understand their needs in order to adapt and transform ourselves, not only in products, but also in our ways of working, to improve with them, so that they choose us as one of their first options when offering our products to their clients.

MGS has a very extensive network of brokers nationwide. We have a hard core of brokers who work with us on a regular basis and who, when it comes to offering a product to a client, value us among their first three options. We are very focused on serving this type of broker at all levels.

What do private and business clients forget to insure and what is interesting to take into account?

Personal insurance. Depending on your age, you become aware of this type of product. When you are young, you don’t think too much about the future, you think more about the immediacy of the day, about the insurance you need: car, house…. And if your economy allows it, you think about health insurance.

I recommend thinking about the future, about retirement, contributing today so that tomorrow you can enjoy it by taking out life savings insurance, which complement retirement.

Life insurance is also very important, including accident insurance, especially for those of us who have a family. You never know what can happen, we should be more aware that at any moment our reality and controlled life ecosystem can change, all our stability can be broken. This type of insurance helps us to protect those we have behind us.

In January this year, MGS Seguros presented its Strategic Plan 2024-2027 under the slogan ‘Composing tomorrow’. What would be the main lines of action for this period?

The values of MGS are commitment, proximity and quality. With these three values we face these years of the new strategic plan. We want to grow in an orderly manner through our traditional, exclusive and broker channels and in a profitable way in order to be competitive for the future. In the sector, as in the rest of the Spanish, European and World economy, we could say that we have a threat: inflation. Inflation is a disease which, if we assimilate it to human beings, could perfectly well be an increase in blood pressure. It is there, you can’t see it and it doesn’t hurt, but when it arrives, if you don’t prepare your company to withstand the rising costs of inflation, you may run out of margins. At MGS, and throughout the sector, we have had to adapt to cost increases (oil derivatives, construction, health, etc.) inevitably resulting in higher premiums.

MGS Seguros is also committed to sports, with sponsorship agreements such as the one with Real Zaragoza, the support to Hockey+ or the support to inclusive sports. What do these types of agreements that imply a transfer to society mean for MGS?

Very much so. Historically we have not been an entity that has been recognized for being in the media, on television, on radio…. But for more than 10 years now we have started to evolve in terms of the brand image we want to project at a national level. We have been making inroads not only at the local level but also at the state level on radio, television, internet and social networks. We have been adding to all this in order to have more visibility and more brand image.

We have a very large presence in Aragon, and this year we have taken another step forward in terms of brand image by sponsoring our beloved Real Zaragoza.

What are the objectives of Fundación MGS for the coming years?

The MGS Foundation was born in 2006 with the aim of channeling a large part of the corporate social responsibility work that was being developed in MGS.

Every year it carries out an important solidarity activity in favor of both society in general and the groups closest to MGS: employees, mediators, collaborators and clients.

Among the initiatives in favor of society are fundraising campaigns to help the main NGOs in our country (Spanish Association Against Cancer, FESBAL, Caritas, Doctors Without Borders, Spanish Red Cross…) and the most needy people and projects in favor of youth and to promote culture and knowledge of the insurance sector.

In terms of actions aimed at the groups closest to MGS, the Foundation carries out intense work in the promotion of scholarship and aid programs, family reconciliation activities and especially in the area of training, where every year it promotes a Cycle of Training Conferences on current issues with top-level speakers.

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