On October 3, the 2nd MAPFRE GLOBAL RISKS Seminar was held in Lisbon. it brought together top national and international insurance brokers for a session on the macro-economic outlook for 2022/2023. António Nogueira Leite was the guest speaker. Among the challenges being faced are the impact of inflation and population aging on the insurance sector.
With nearly 40 people taking part, the meeting, hosted by MAPFRE, brought together managers from the insurance sector’s principal brokers for a session on the macro-economic outlook for 2022/2023, on the risks expected for this period and the main difficulties and opportunities for the insurance sector, especially in the large risks sector.
The event was attended by the main managers from MAPFRE GLOBAL RISKS, a unit of the MAPFRE Group that offers global and comprehensive solutions for international corporate clients worldwide.
Highlighting MAPFRE Portugal’s positive results up to the month of August, with more than €200 million in business being written, Luis Anula, CEO of MAPFRE Portugal, indicated that the company wishes to continue growing in the Portuguese market in a profitable manner and focusing on customers using a multi-channel strategy, opting for the transformation and streamlining of business processes.
For the CEO of MAPFRE Portugal, “2022, despite the optimistic results and the growth potential for insurers in Portugal, the year has not been an easy one thus far. We emerged from the pandemic and entered a war, which obviously has its impact on our day-to-day lives and that of everyone working in the insurance industry. We are seeing the effects of this situation as costs increase, impacting the automotive sector, with a higher level of work-related accidents and an increase in the frequency and cost of claims.”
For his part, Jose Antonio Ruibal, Chief Underwriting Officer of MAPFRE GLOBAL RISKS, recalled the main crises that have affected the world in the last three years, interspersed by sparkling recoveries that ended quickly, such as the blockade of the Suez Canal, the pandemic, the blockade of ports in China and the war in Ukraine, which “we had to face right when we had thought that the insurance sector would start to grow again.”
For José Manuel Inchausti, CEO of MAPFRE Iberia and Third Vice President of the Board of Directors of MAPFRE, one of the greatest challenges will be the aging of the population for society in general and, as a result, for the company. The manager emphasized the importance of projects from the MAPFRE Foundation such as Ageignomics, a Research Center for Aging and a think tank, that will soon be arriving in Portugal.
Unparalleled levels of uncertainty
For António Nogueira Leite, an economist and former Secretary of State of the Treasury and Finance, and who participated as a guest speaker at the session, the current levels of uncertainty “are unparalleled.” “The past few months have seen a reduction in private consumption in reaction to a real loss in earnings for families.” Lower consumer confidence, in line with other European countries and caused by uncertainty, means a slowdown in the economy.
Against this uncertain backdrop, Nogueira Leite believes that “Portuguese people are adapting well,” but points to rising interest rates and the fact that 95% of mortgages are variable-rate, versus an average of 15% in the EU, as risks to be faced in the coming years. On the other hand, the increase in the energy bills, which in some sectors have risen by 6 times, has led some factories to implement technical stoppages.
However, there are still serious problems to solve in two areas: the elderly and health. “There is a lot to do for insurance in areas that the State cannot resolve,” he opines, also highlighting the fact that the levels of property insurance protection in Portugal are especially low.
Demographic pressure and an aging population will have consequences in many areas: “There is a sustainability issue with regard to Social Security. (…) A person born in 1976, when they retire, will only receive 45% of their last salary. That’s a problem, but also an opportunity for insurers, as they can help solve family problems.” There is also a supply issue with care for the elderly: “It’s an area of difficulty but also one of opportunity.”
When it comes to healthcare, “bearing in mind how things work, with the evolution seen in life-prolonging medicine and the increase in the associated cost of this, any healthcare system will have to invest heavily over the coming decades. Use of the cooperative and private system will increase, offering services that meet our expectations,” he emphasized.
On the development potential of the insurance sector, Nogueira Leite believes that Portuguese at the moment use little in the way of insurance and that the sector has a lot of margin for growth. “Structural problems without the insurance sector would be even more serious,” he concludes.