At the start of the year, MAPFRE RE restructured its business to place life at the heart of its global operations. Javier Sánchez Cea, Chief Regional Officer for Asia-Pacific, has been working out how to deliver this strategy in some of the firm’s fastest-growing markets.
“Life is very important to the whole company. This is a strategic move that we have made. We want to do more life, to diversify our portfolio, and a lot of this will come from APAC,” Cea tells (Re)in Asia.
According to its latest financial statement, 12% of MAPFRE RE’s €7.8bn (approx US$9.06bn) reinsurance premiums come from APAC. This consists mostly of property and casualty business.
Less than 5% of this comes from life insurance and Cea says that he “would be very happy” to see the proportion grow closer to 20%.
“We obviously need to make sure that we are performing on product and delivery, but we have big ambitions here. APAC is well-positioned to align with this new strategy,” says Cea. In January, Jamie Song became MAPFRE RE’s Head of Life, Accident and Health for APAC, based in Singapore.
Javier Sánchez Cea
APAC Chief Regional Officer at MAPFRE REOpportunities for growth
There are a few different strands to the reinsurer’s APAC strategy.
For one thing, Cea is keen for MAPFRE RE to leverage the existing relationships that it already has in the non-life sector. This is a strategy that has been especially successful in India this year.
“I have had a few meetings with life CEOs, and they have immediately opened the door for us because of the good relationship we already have on the non-life side. This is something I want to keep exploring. It’s a great way of growing this line of business,” says Cea.
Another potential opportunity for growth is in structured solutions, especially to provide capital relief for life insurers preparing to deal with new risk-based capital rules. MAPFRE RE set up an APAC-based team in March specifically to look at this area of the business.
“We have a lot of experience doing these solutions in Europe. We now want to bring this experience into APAC,” says Cea. “We are putting a lot of effort into this at the moment, so it will eventually become a top-line business for us in the region. This will help us grow with our clients and strengthen our relationships with them across the board.”
Javier Sánchez Cea
APAC Chief Regional Officer at MAPFRE REBeing close to the client
The two markets that perhaps have the greatest potential for MAPFRE RE’s ambitions in the life sector are China and India. These are two countries with a mushrooming middle class and a sizeable protection gap.
Last July, MAPFRE RE secured regulatory approval to establish an onshore branch in China. Cea says that, although he is happy with how the business in China has been growing, it is still principally writing P&C lines. Cea says that he plans to establish a dedicated life team in the country next year.
MAPFRE RE doesn’t yet have an onshore branch in India, but this is something that could be about to change.
“We have been growing very fast in India over the past five years, and right now we are assessing the possibility of establishing a local presence,” says Cea.
For the past few years, India has been encouraging foreign reinsurers to set up onshore rather than do all their business from overseas. The country has been simplifying its insurance regulatory framework, while at the same time penalising cedents for sending business overseas.
Javier Sánchez Cea
APAC Chief Regional Officer at MAPFRE RE“There’s no problem in writing the business that we do from overseas, but it would be a milestone to be closer to our clients. This is a model we’ve followed around the world for decades,” says Cea.
The Chief Regional Officer says that this need is arguably greater in life than in non-life because of the specific assessments and services that are needed.
MAPFRE RE is currently writing some life business in India, but Cea is very keen to scale things up.
One key market that Cea does not think needs a branch, at least for the time being, is Japan. MAPFRE RE has been active in Japan for nearly 40 years, ever since the reinsurer first started expanding in APAC. In 2017, MAPFRE RE established a representative office in the country, but has not yet set up a subsidiary.
“We have a very mature relationship with our clients in Japan, but we want to keep growing in the country,” says Cea. “Our strategy is to keep doing what we have been doing for the past 40 years. This is about deploying more capital and being a reliable partner for our clients. We are close to the market, and we do not see the need to transform our local presence into a branch.”
