Mapfre Global Risks wants to grow its specialisms in the London market and is working on a UK retail proposition, says Chris Smith, chief regions and markets officer for International.
Mapfre Global Risks chose London as a platform for international growth before the June 2016 referendum on the UK’s membership of the European Union. Despite Brexit, the Mapfre subsidiary remains committed to this decision and it plans on expanding in the commercial space in the UK in the near future.
Chris Smith, chief regions and markets officer for international at MGR, admits Brexit could place further regulatory demands on the insurer but insists it has a competitive advantage over its UK-based counterparts. MGR wants to attract large corporate and specialty risk clients, especially in the aviation, construction and energy sectors, before targeting the UK regional market.
Why did Mapfre Global Risks choose London as a platform for international growth?
London had already been chosen as a platform for international growth before Brexit, as it is a world-leading centre for global and specialty risks. Brexit doesn’t change this position.
Over time, there may be some minor adjustments in terms of premium flow, but we believe London will continue as a market leader, due to its high concentration of world-class underwriting talent, which Mapfre Global Risks is already actively tapping into.
What is your view of the UK regulator?
Mapfre is a global business servicing clients’ risk needs across 125 countries and five continents, and with operations worldwide, so we are used to working in many different regulatory environments. The standards of UK regulation are high and we fully support an industry that is properly controlled and regulated.
What are Mapfre Global Risks’ plans for growth in the UK market?
Our primary focus at the moment is to build a profitable and sustainable business in the London market, by attracting large corporate and specialty risk clients from across the UK and the international business that comes into London from all over the world. To this end, we have already hired some top talent in the energy, power and construction sectors, and we have several big hires in the pipeline for energy risks and aviation.
The next growth target is the UK regional market and we are currently in the process of hiring a senior, high-profile underwriter to lead this charge. A new London and regional offices will follow further down the line.
Mapfre Global Risks is in this for the long term and we are in no rush to gain market share. Instead, we will work with brokers and major clients who appreciate a partnership-based approach and deep underwriting and risk expertise, across lines. These are all hallmarks of Mapfre.
What is Mapfre Global Risks’ partnership strategy? How does that fit with the London market?
We aim to be more than an insurer, but rather a partner in risk with our clients, with long-term strategic relationships. So it’s not just about price, which is the challenge for many insurers operating along a specialty lines basis in the current soft market.
We have key account managers for our large corporate clients, and they work hard with our specialist underwriters to deliver integrated insurance programmes that match our clients’ specific needs, including developing new products and limits across territories in a very transparent way.
Which insurance sectors do you expect will grow the most? Are these your primary targets?
Traditionally, Mapfre has grown and been successful by following our major Spanish clients’ moves overseas, initially into Latin America and then into other territories, with risk solutions that run across all lines and all sectors, including energy, construction, utilities and aerospace.
One of our key aims is international growth and development to rebalance the books with Spain and Latin America. The London and UK market is central to that aim.
As market leaders in Spain and Latin America, we have plans to grow and lead business in London, as well as Europe, Asia Pacific, Middle East and North America. In each of these territories, we will build the capabilities to become a major player in the global risks segment and across specialty lines.
Overall, our target clients are companies with turnover over €150m (£140m), including those requiring international programmes, then €150m to €500m (upper middle market) and finally over €500m.
We also see an opportunity to grow our specialisms in the London market and we are working on our UK retail proposition, which will closely follow the needs of UK clients in the coming few years.
How do you adapt to changing regulations and innovative technologies?
Regulation and innovation are challenging in terms of resource needs, but all our employees are trained to respond to this. We are aware that Brexit could put further demands on us from a regulatory perspective, but plans are in place to deal with that.
As an established European insurer, we have a competitive advantage over many of our UK-based competitors which are currently distracted by having to open offices in Dublin, Luxembourg or Brussels. We are already in Europe and the UK and underwrite in both places equally.
Regarding innovative technologies, this is being led at group level, including in the insurtech space. This is something that we are also starting to explore in London and we are open to ideas and opportunities that support our growth strategy, improve operational efficiencies and support our broker and client partners.
What are the keys to success in emerging countries?
First, understanding the local market and its nuances, followed by a combination of flexibility and agility to adapt to emerging market needs. Our flat underwriting structure and ability to make decisions on the ground enables us to do this.
We also benefit from a recognised global brand, supported by robust control processes to ensure that we are able to be profitable to stay in the market for the long term.
What are the biggest challenges facing Mapfre Global Risks?
As with other insurers, the biggest challenges are the pace of change, in terms of clients’ needs and the excess capacity in the market.
However, we feel we are better placed than most to deal with these, through our operational structure and agile, flexible approach to business.
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