Mapfre Internacional SA’s majority shareholding in Middlesea Insurance will offer the Maltese market new products and services and gives Middlesea policyholders, stakeholders and employees the opportunity of being part of this large international insurance group, according to Javier Fernandez-Cid, the managing director of the global Spanish insurance giant.
In an interview with The Sunday Times Mr Fernandez-Cid says: “The most important priority is to increase the quality of Middlesea’s offer and to bring to Middlesea customers new products, new techniques and new services. We want to integrate both Mapfre into Middlesea and Middlesea into Mapfre.”
Mr Fernandez-Cid says the economic indicators point to the Maltese economy doing very well over the past years and that there exists the potential for growth in the insurance sector.
“The Maltese economy has a level of maturity that the insurance industry has not yet reached which means there is the potential of a larger per capita expenditure in insurance.
“There are also other areas which have yet to be introduced in Malta such as private pension schemes. I think the economy will do well when pension legislation is passed and customers are given the opportunity to save for their long term needs.”
Mapfre now owns 50.98 per cent of Middlesea Insurance and Mr Fernandez-Cid believes its controlling interest in the Maltese company was a good business decision.
“If we hadn’t seen the good and the positive elements in Middlesea we wouldn’t have taken this step forward. First of all, Middlesea brings with it its position as the leader in the Maltese insurance market.
“Secondly, the Maltese market is an English speaking insurance market within the European Union, which brings a lot of added value to Mapfre.
“Malta is now our fourth European market – after Portugal, Spain and Turkey – but our first English speaking market in Europe.”
Mr Fernandez-Cid is full of praise for Middlesea’s management, calling it “very qualified” and Middlesea “a well run company”.
“We are now incorporating into our group a team of professionals. The business ratio of profit to employee is the best in the market. Middlesea has been able to make a profit and last year managed the transition from a problematic situation that arose in a particular market very well. The situation required brave decisions and a brave way of handling certain problems and Middlesea did very well,” he says.
He adds: “So we are happy we are incorporating a very good team into the Mapfre organisation and that is an important asset for us.”
The fact that Middlesea is a listed company, he stresses, is very important to Mapfre and “is an added value because it allows local shareholders to participate in this new growth potential that we have”.
He does not exclude the possibility of Middlesea executives being sent to other markets where Mapfre operates, pointing out that the head of the group’s reinsurance unit is a Portuguese citizen.
He says he is absolutely delighted that this investment in Middlesea finally materialised. He calls it a “historical evolution” as the Spanish company was a minority shareholder for many years. He adds: “It was a natural step for us to become the largest shareholder”.
He explains that Middlesea Insurance is now welcomed into a much larger group, a global major international insurance player, which operates not only in the Spanish market but in 43 other markets across five continents.
“Mapfre is a totally independent specialised insurance group; our interests are only insurance and insurance related services. This will bring Middlesea policyholders, stakeholders, employees and management the opportunity of being part of this larger international group, with all the benefits that this brings, such as access to the latest insurance techniques, exposure to the changes in regulation in other markets, and obviously it will give the opportunity to the Maltese insurance market to have access to other practices worldwide,” he says.
He explains that Mapfre is owned by a foundation which has two major goals. One is to promote social interests in different areas such as culture, the arts, insurance studies. The other is research in different areas such as motor safety and traffic accidents.
“We are very specialised in what we do. Any unit of our group is very specialised which means it undergoes a lot of research, on which we spend millions of euros every year. Such specialisation will be made available to Middlesea.”
He says Mapfre is very happy with its partnership with Bank of Valletta, which owns 31.08 per cent in Middlesea Insurance and 50 per cent of MSV Life plc, and which was important for Mapfre’s investment in Middlesea.
“Bank of Valletta remaining a shareholder in Middlesea Insurance shows a commitment to the company which for us is very important.
“BoV is also an important distribution channel for MSV Life. So we definitely want to make use of this alliance. The fact that Mapfre Vida (Life) is represented on the board of MSV Life shows a willingness to support and strengthen that partnership,” he says.
How concerned is he with the situation in the eurozone, particularly in Spain and Italy, and its possible negative effect on the insurance industry?
“Generally speaking our group is diversified enough not to be concerned. Sixty per cent of our revenue worldwide comes from markets outside the Spanish market. I think the Spanish economy is strong enough to survive this present turmoil.
“We are the largest non-life insurance group in Latin America and we will soon be the largest in the life sector through our presence in Brazil, through our joint venture with Banco de Brazil,” he says.