AVLA Insurance Group extends surety and trade credit cover to SMEs in the US

By Edlyn Cardoza

Latin American insurance group AVLA is set to expand its surety and trade credit insurance solutions for SMEs to the US. After a successful landing in Mexico and Brazil, AVLA is preparing its landing in the United States to continue to strengthen the technology in surety and trade credit and to continue delivering solutions to SMEs in a country with high growth in this type of insurance.

AVLA, one of the ten leading surety and trade credit insurance companies in Latin America, with a presence in four countries in the region, continues its work to reach new markets. This time it’s the United States, based on the experience that insurance and technology are an alternative to solve SMEs’ limited access to financing.

“14 years ago we made a commitment to serve a segment with very low access to financing, today more than 50% of our direct premium is from SMEs. We did this by developing a set of digital assets that position us in an unbeatable way to achieve regional scalability and greater capacity to serve our clients,” said Ignacio Alamos, CEO of AVLA Group.

AVLA has two main digital assets that have enabled it to become faster and more efficient. First, automatic risk underwriting: more than 65% of decisions are made automatically through machine learning and artificial intelligence models, with multiple sources of information and historical business data. Secondly, the contracting of surety is 100% online, and in less than 7 minutes: more than 45% of the policies are issued through a 100% self-managed digital process.

“We remain committed to the technological transformation of the surety and trade credit sector so that our agents and brokers can access a simpler and more efficient operation, so that local companies can count at all times with an agile and solid financial support,” says Alamos.

When it comes to SMEs, AVLA, despite the adverse world situation, has not ceased to provide guarantees and solutions to this segment. In numbers, more than 60,000 small and medium-sized companies have been backed by its policies, and more than 50% of its total premium corresponds to this segment.

Following its successful start of operations in Mexico and Brazil in 2021, AVLA projects revenues of close to US$150 million by 2023, which places it among the 5 most significant companies in the region in Surety and Trade Credit Insurance.

“Landing in the US means starting to compete in a market 4 times larger than the South American market and we are convinced that there are great opportunities in a country with high growth and low loss ratio, a reactivation plan in infrastructure projects and great opportunities to continue to enhance technology in surety and trade credit,” emphasizes Álamos.

The surety and trade credit market in the United States has grown by more than 20% since 2016. In November 2021, the US federal government established a USD 1.2 trillion infrastructure plan which will boost it even more. Therefore, AVLA will focus on micro and small companies to strengthen the segment, seeking alliances with minority associations at the national and state level.