XPRIMM: As global re/insurance groups are struggling with low interest rates, currency fluctuations and even a more challenging geopolitical climate, which are the most important challenges the insurance industry has to currently face and how do you plan to tackle them?
Javier San BASILIO: As a global reinsurer, we at MAPFRE Re face all the above-mentioned issues; all of them relevant to our activity. The low interest rates, especially in Western and developed countries, present a challenge, but also an opportunity to a company like ours, as we have always focused on sound technical basis and appropriate risk management and underwriting. The geopolitical challenges need also a very close attention, as we aim to be able to assist to the local needs of our clients and those of our employees. The balanced global reach of our group allows us to be very proactive in managing the potential difficulties in any given territory.

The increased protectionism seen in some countries and the changing regulatory frameworks also pose an additional challenge, as they limit or even inhibit the efficient access to the global reinsurance market.

XPRIMM: Do you, as a primary insurer and, at the same time, a reinsurer, see climate change as a reality? What role do you believe that the insurance industry must play in this regard, considering that it has accumulated specific know-how and they are among the first to feel the financial impact?
J. S. B.: MAPFRE is committed to the battle against climate change, not only are we signatories to the Paris Pledge for Action, but we are also listed as one of the most committed companies in the world in fighting climate change, as acknowledged by the "Carbon Disclosure Project" List.

We actively contribute toward research on the effect of climate change on the insurance industry, and on how we can help our clients in managing and protecting this risk better.

XPRIMM: One of your core directions has been a continued development in Latin America. Do you see that region as one of the core areas for MAPFRE?
J. S. B.: Spain and Latin America are the territories where MAPFRE Re initially developed its business. We have always been - and will be - committed to the Latin American continent. However, for many years already, MAPFRE RE has achieved a very strong presence in other regions such as Europe and North America, and we can proudly see ourselves now as a global reinsurer. We currently have 19 offices throughout the world and have business in more than 100 countries.

XPRIMM: What is the group's view on the CEE countries, considering that your presence there is limited compared to other large groups? Which are the pros and cons, in MAPFRE's view, regarding the markets in this region?
J. S. B.: Central & Eastern European countries are organizationally considered one single region but actually, the region is very heterogeneous. As a result, our approach should be heterogeneous too.

Countries like Czech Republic, Poland, Slovakia and Romania benefit from a slowly recovery of their most important trading partner, in fact the EU. In the last few years, we have observed many positive factors like an ongoing reduction of unemployment, low inflation, low interest rates and reduced raw material prices.

The increased demand of private households is the motor of above average growth rates compared to other important emerging countries like the so-called BRIC states. Given the positive economic outlook, larger groups will always eye the region with interest. It is true that the economic outlook is not positive in all countries:  the economy of the Balkan countries is stagnating for some years and the impact of the economic damage caused by the conflict between Ukraine and Russia can be higher than currently reported.

MAPFRE Group's presence in the region is mainly through our reinsurance activities. MAPFRE Re is doing business in most of the countries for more than 15 years. Our activities were intensified 10 years ago with the opening of our Munich office, and today we can say that our company ranks within the Top 5 or Top 7 group of reinsurance providers in the region with stable portfolios and stable results.

I would highlight the fact that most of these markets are dominated by international groups with large market shares. This prevailing situation makes it more difficult for us and other reinsurers to develop new business with local companies. In addition, in some countries we face extreme competition. Looking for profitability, we see ourselves forced to be more selective and as a result, we have to accept reduced market shares.

XPRIMM: Which are currently your core markets and how did they evolve over the past 4-5 years? Do you have in mind any geographical expansion in the near future?
J. S. B.: For MAPFRE Re, Europe, Latin America, IBERIA (Spain and Portugal) and North America are the main areas currently. The Asia Pacific region has been growing steadily in the past years and we see that trend continuing. We currently have 19 offices, and we would be open to increase that number if we think that it would help in better serving our clients. We think our network is fairly substantial, but are always evaluating new opportunities.

XPRIMM: One of the key words heard within the insurance world is digitalization. How do you see it being applied by MAPFRE or influencing your activity?
J. S. B.: Without doubt, digital transformation is changing the business model of insurance companies, and also the risks we cover. We have to be able to provide cover for such new risks and give solutions to society, as our industry has always done.

Digital transformation is one of the group's strategic objectives. In primary insurance, the group aims at increasing to 30% the number of digital transactions executed by clients in our main markets. But digitalization not only will change the way in which primary insurance operates and relates to clients. For the reinsurance industry, it is also an opportunity to achieve operational efficiency and increase our services.

XPRIMM: Digitalization has also drawn the interest of industry outsiders towards the insurance business. Have you identified possible opportunities for partnerships or maybe even potential threats?
J. S. B.: We, as everybody else, have identified both opportunities and threats derived from the digitalization process.

We know that risks we will have to face in a few years do not exist today. MAPFRE Re is clearly determined to be ready to face these challenges, and to be a valuable partner to our clients. We will be ready to offer value propositions to our different kinds of clients.

We have already started building partnerships with what you call industry outsiders, people and services not traditionally part of our industry but whom we think will have a relevant role in the future.

XPRIMM: Which are you strategic development directions for the years to come?
J. S. B.: Our challenge is to continue with the objective of profitable growth in an increasingly competitive environment. At MAPFRE Re, we are convinced that we will only be successful when we are able to provide value to our clients.

This is why client orientation is one of the strategic key elements for us. We have launched a series of internal initiatives that place the interests and needs of the client in the centre of all our activities. This comprises elements like products, services, prices, the entry in potentially new lines of business, etc. In addition, we have to be more flexible in the way we adapt our own organization to special client segments. All this will be supported by a total review of the internal processes. Operational excellence and efficiency are other key elements in this respect.

Apart from strategic initiatives, MAPFRE Re also benefits from special circumstances: from my perspective, the most differentiating factor is the team. Though in figures it is not very extensive - around 350 people around the world, we believe it is a very diversified and extraordinary team that we try to strengthen further through sophisticated programs of talent management.

Finally, one should not forget the fact of belonging to the MAPFRE Group, which is also a clear element of differentiation from our competitors. It brings the strength of the brand, the valuable culture of company, its prestige, reputation, and solvency. We are the only relevant reinsurer belonging to a global insurance group. It is an added value because it gives us a deep knowledge of insurance from inside of the organization itself, which, at the end, is very appreciated by our customers.