Conclusions of the MAPFRE GLOBAL RISKS 24th International Seminar, “The Challenges for Global Risk Markets Arising from the Economic Recovery”, which took place in Bilbao.
1. Mexican Market
In Mexico, the Energy Reform and the recent National Infrastructure Program will have a huge impact on the country’s economy in terms of the hydrocarbon and construction industries, and this will have enormous repercussions for Mexico’s insurance market.
2. The emerging markets of Colombia, Peru and Chile
These markets show high potential due to their size, legal stability and economic growth forecasts, all within the context of the trade treaties established in this zone.
The shortage of key infrastructures to develop vast geographical areas represents a clear investment opportunity.
The development of the manufacturing industry, from suppliers of raw materials to exporters of intermediate and end products, represents an additional opportunity, and the insurance market must share its skills and know-how throughout this entire process.
3. Brazilian Market
Brazil has enormous potential as the world’s seventh largest economy. In spite of major challenges, Brazil offers excellent opportunities for the major risks insurance industry over the next few years due to the development and maturity process in which it is currently immersed.
4. Does London still lead the global insurance market?
We have reached the conclusion that London is reacting very quickly to maintain its leadership in this constantly changing global scenario.
The London market offers great opportunities in terms of Specialty Lines, where expert knowledge is critical.
5. The Spanish market and the economic recovery.
At last year’s seminar we concluded that the insurance industry performed better than all the other industries during the financial crisis, and we can confirm this today as well. This fact must be used as a solid platform for growth in line with the positive performance of the Spanish economy that both internal and external agents are predicting.
The industry agrees that efficient risk management, involving all players – clients, brokers, insurers, reinsurers, appraisers and lawyers – is an essential tool for gaining the maximum benefit from this change in trend.
In previous editions, it became clear that companies must have a business continuity plan. The case of Campofrío is excellent proof of this: its continuity plan has provided the company with an optimal approach to management after the Burgos fire.
1. The current security paradigm is changing due to the increasingly systemic and global nature of certain new risks, like cyber risk for example. Governments, companies, insurers and other institutions involved in risk management must continue to develop their evaluation and prevention systems to face this challenge successfully.
2. The survey of turbine-related incidents carried out by MAPFRE GLOBAL RISKS has improved the knowledge about the various technical factors that cause the most frequent incidents, by type of turbine and generation technologies.
3. The power generation market has faced new challenges, mostly due to financial and regulatory uncertainties. As a result, new technologies and solutions have been developed which would otherwise have taken longer to emerge and which represent major challenges in terms of prevention.
4. With regard to catastrophic risk, detailed quality information about risk situations plays an essential role in efficient model-based loss estimation. These catastrophic models are indispensable for making underwriting decisions.
5. Over time plastic sandwich panels have been involved in numerous fire incidents resulting in great losses. Their protection must be considered at every stage of the installation, from design (correct selection and use of material to limits the scope of damage) and assembly (the manufacturer’s instructions must be followed to the letter) to their actual use, where prevention measures are critical to avoid all sources of ignition.
6. After analyzing the main environmental aspects of fracking operations, we concluded that their anticipated impact is similar to the impact of conventional exploration and production operations. The key is to correctly identify risks in the early stages of the project.
7. The satellite launch vehicle industry is gearing up for a new stage in its business development designed to meet performance, flexibility and reliability requirements (“minisats”) while reducing costs. For the space industry, there are new challenges such as commercial manned flights, equipment in the Earth’s orbit, reusable technologies, managing “space debris”, and space exploration. The insurance industry will have to work to offer adequate solutions for these new risks.