Interview with Ignacio Baeza, Vice-Chairman of MAPFRE and President and CEO of MAPFRE Global Risks
Risk Management and Insurance Magazine (hereinafter GRyS): MAPFRE recently approved a new structure for its global risk business. What were the main reasons for this strategic decision?
Ignacio Baeza (hereinafter IB): At MAPFRE, we see our more than 10 years of experience in the global risks business, under soft market circumstances for the entire period, as very positive. In addition, the impact of catastrophic events, especially in 2017, has demonstrated our solvency and ability to meet our client´s needs, as well as the effectiveness of our reinsurance protections. Within this context, we’re firmly convinced that now is the time to endow the Group with greater capacity to manage this type of risk while providing increased financial stability and efficiency. In addition, this new structure will allow us to boost the quality of services we provide to our clients.
GRyS: Given the new approach, what will the new role of MAPFRE Global Risks be?
IB: MAPFRE Global Risks will continue being MAPFRE’s Business Unit specializing in providing comprehensive and innovative insurance solutions for large corporations, multinational companies and global sector companies.
This is why it will manage, in coordination with the Group’s insurance companies, large-risk business and will be responsible for technical aspects of the business, claims handling, providing services and sales activity. Risks will be underwritten by MAPFRE companies in the different countries and reinsured by MAPFRE RE.
We will continue, as we have until now, being technically rigorous in the underwriting and technical knowledge of risks, in keeping with the Group’s “Technical and Operational Management Excellence” strategic initiative, with a focus on Profitable Growth.
GRyS: What changes will this require and what improvements will MAPFRE offer to the high-risks market in this new chapter?
IB: Under the new configuration, MAPFRE ESPAÑA will handle the insurance business and MAPFRE RE will be responsible for the reinsurance business. This will allow us to optimize the Group’s equity and resources and ensure greater efficiency as a result of economies of scale. For the people involved in this new arrangement, it represents a unique opportunity to take maximum advantage of the talent we have been promoting at MAPFRE for a long time.
All of this clearly grants us greater capacity for the large-risk insurance business by transferring and unifying equity from MAPFRE Global Risks to MAPFRE RE, as well as expanding our insurance solutions portfolio. Without a doubt, this will contribute to offering better service to MAPFRE’s global clients.
GRyS: What will MAPFRE RE’s role be in this new framework?
IB: MAPFRE RE will serve as the Group’s sole reinsurer for the different types of risk managed by MAPFRE Global Risks, benefiting from its larger size and portfolio diversification and increasing the size of its business.
At the same time, it will strengthen its customer service capacity and expand its solutions offer to business sectors and lines where currently we don’t operate.
GRyS: Will MAPFRE RE change its traditional reinsurance marketing model?
IB: Not at all. MAPFRE RE will continue as always to strictly separate the reinsurance work it does for MAPFRE’s different insurance companies from the work it does for other ceding companies.
With this new configuration, it will position itself as one of the 15 major reinsurance companies in the world, with more than 5.5 billion euros in annual premiums.
GRyS: What is the timeframe for the full implementation of the reorganization model?
IB: We expect this transformation to be fully operational by January 2019.
