The current situation and future prospects for the economy and the (re)insurance sector, the impact of inflation and the challenges facing the industry were some of the topics that were addressed yesterday on the first day of the Inter-European Meeting of Insurance and Reinsurance 2022 (ENTRE 2022), organized by INESE and sponsored by Aon, A.M. Best, Decartes Underwriting, Gallagher Re, Gen Re, Guy Carpenter, Liberty Mutual Reinsurance, Lloyd’s, Munich Re, Mapfre Re, Nacional Re, RGA Re International Ibérica, Scor y Swiss Re.
Global uncertainties
Cristina Manzano, economic journalist and director of esglobal, he explained that the world faces several uncertainties: the rise of Asia (China, especially) and the decline of the West; the end (or not) of globalization, the configuration of a new bipolar order, led by the United States and China, or the construction of a new fragmented and regionalized world order (with new free trade agreements in Africa or Asia-Pacific) or the crisis of democracy (assault on the Capitol in the United States, rise of the extreme right in Europe…).
Ernesto Mestre, Deputy Director General of Finance at Mutua Madrileña, He pointed out that inflation has an impact on costs, both in the level of provisions —due to the affectation of the reserves of long-tail lines— as well as in the cost of claims and in personnel, structure and general expenses. However, he noted that it is difficult for the insurance sector to translate inflation into premiums. “It is a very mature business with a very high level of competition”, he pointed out, for which he considers that there is little room to increase premiums. On the positive side, he pointed out that the increase in interest rates will allow the profitability scenario of the financial results to change. However, he insisted on the difficulty involved in overcoming the evolution of inflation, especially for an investor looking for a low level of risk, as in the case of insurance companies.
The future of mobility
Joachim Mathe, director de Global Consulting Unit de Munich Re, indicated that mobility will bring changes to traditional insurance in the car market and highlighted the transformation of personal mobility, with a transition from the individual use of the vehicle to a new mobility based on carsharing, the use of shared vehicles and car models by subscription and micromobility (bike or electric scooter), with the consequent impact that this will have. He also focused on the impact of the connected car, which allows fine-tuning risk selection and pricing, improving the user experience and optimizing claims management.
Affirmative y silent cyber
Arnaiz Pillar, Casualty Referral Desk for Europe and Latam of Gen Re, specified that the affirmative cyber are new coverages that affect pure immaterial and patrimonial damages, such as paralysis of systems or damage to data, including incident resolution costs, loss of profits, stoppage of activity derived from cyber incidents, loss of data, liability for exposure of personal data, etc. In the case of silent cyber, he indicated that they refer to changes in exposure due to the impact of cyber risks in all lines.
Impact of Covid-19 on longevity
Enrique Ruiz, general director for Spain and Portugal of RGA Re International Ibérica, spoke of the impact of Covid-19 on longevity. He explained that life expectancy has been reduced by 0.58 years in Europe, while in Spain it has decreased by 1.44 years. Spain and Portugal have been the most affected countries in the European Union due to excess mortality: +17% and 24%, respectively, in June 2022. He stressed that “it is important that insurers closely monitor the factors that increase the risk ”, as they could have significant underwriting and pricing implications.