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Speaking at Semana del Seguro, an annual meeting in Madrid of top insurance executives, Juan Hornachea, General Director of Insurance at Mutua Madrileña, was unequivocal in his views on Solvency II. He said that a burst of 'hyper-regulation' could lead to a state of 'hyper-paralysis' in the sector.
Estaban Tejera, First Vice-President at Mapfre, also voiced concerns, claiming authorities will not be able to police the regime. "The new regulation will be impossible to supervise if it continues in its current vein", he said. Whilst conceding that Solvency II will bring some important advances to the sector, he also expressed concerns over the bureaucratic burden the new regulation will create for insurance companies.
Despite worries over regulation, the insurance industry leaders made a valiant effort to paint a positive view of the Spanish insurance sector. They stressed that most insurers have continued to post positive results despite the dire state of the Spanish economy and were sanguine about the likely effects of the painful economic reforms upon which Spain is embarking. They congratulated themselves on the quality of talent at their disposal and one, Julián López Zaballos, CEO of Zurich in Spain, likened insurance professionals to 'artists' that add value to society.
The executives also highlighted opportunities created by the financial crisis. The fact that the Spanish government is gradually disengaging from areas such as pensions and universal health coverage will increase the role played by insurance companies, both in terms of company sponsored group coverages and individual health and pension plans, Mr Hornachea said.
Ignazio Baeza, President of Mapfre Seguros España y Portugal, stressed that the market will inevitably be required to fill the gaps left by an unsustainable public pension system. Jaime Kirkpatrick, CEO of AEGON in Spain, agreed with this view, but stressed that studies have shown that the private market has yet to convince Spaniards that it can be trusted to build their retirement pots.
With a challenging domestic market making life hard for Spanish insurers they have been looking across the ocean to Latin America for growth. "There is no doubt that there is much growth potential in Latin America", said Rafael Casas, President of Mafpre América.