Uncertainty, inflation, volatility… the economic scenario that opens up before us in the coming months is going to be complicated. To deal with this situation, the European Central Bank has already announced that it will put an end to the purchase of European public debt -from which Spain has benefited in recent years- and to gradually start raising interest rates interest. These measures do not please everyone equally, but the ECB considers that they are necessary to try to mitigate the effects of the inflationary spiral that began at the end of last year and accelerated by the Russian invasion of Ukraine at the end of last February.
In recent years, almost a decade now, extremely low interest rates have hit the life insurance savings business head on. In a market, such as the Spanish one, accustomed to betting on guaranteed savings products, the context of rates below zero meant a rudder in the strategies of the insurance companies that sell life savings towards other types of products, linked to assets and focused on the policyholder – who contracts – assuming most of the risk, as is the case of unit linked, which are asset-linked savings insurance.
Changing the rules of the game
At this point, the insurance sector is once again facing a change in the rules of the financial game, which will force it to once again change its strategy to redefine the offer of savings products. “All this, together with the increase in claims in some non-life branches and the birth of new insurance solutions that are much more agile than the traditional ones, is narrowing margins and, consequently, requiring high qualification and efficiency in the exercise of insurance. insurance activity”, explains the consulting firm AV Group.
“Faced with this situation, it is time to redesign a new business model seeking to adequately meet the demands of a more digitized and informed society, in the face of a new volatile environment, through four fundamental pillars: efficient management, innovation, digitization and education/training. continued,” says Antonio Barriendos, managing director of AV Group.
Generate more with less. And this is achieved through efficient management with committed employees. “The great corporate speeches are of no use if the employees do not drink from them and preach with them,” says Antonio Barriendos.
Most innovative products
The consultant coincides with many voices in the sector, who advocate innovating in products more in line with the needs of today’s society, which suffers from a lack of secure employment and, consequently, secure long-term income. It is a priority to formulate products that are adapted to the economy of many families, their rhythm and variability of current life. There are specific activities that could become the target of some interesting offers depending on the ability to pay, the periods of activity or new types of insurance adapted to the priorities and preferences of interaction with young people.
“As it happens in all fields, great challenges give rise to sometimes unexpected achievements. The sector is at a unique moment for companies to define their strategy and take advantage of available technologies to reinvent their long-term business model and for regulators are also capable of responding with agility and simplicity to the demands of their citizens”, concludes Antonio Barriendos.
flat evolution
While this change of cycle arrives, life insurance closed the first quarter of the year with 194,644 million euros of savings from its customers, managed through all types of life insurance. This amount is very similar to that recorded last year for the same dates. To this amount must be added another 58,298 million corresponding to the assets of pension plans whose management is entrusted to insurers. These increased by 17.26% in interannual terms. In total, the insurance sector looked after 252,942 million euros of its clients at the end of the first three months of the year, 3.42% more than a year earlier.
The insurance savings business has decreased by a slight 0.21% since the start of 2022, to 187,360 million. The sector manages to maintain the resources of clients in its charge despite the fact that during the first quarter of the year interest rates remained low, says Unespa, the employer of the Spanish insurance sector.
Unit linked insurance, those in which the policyholder assumes the investment risk, are the only ones that grew in year-on-year terms. Assets under management increased by 18.78%, to 20,211 million euros. The other product lines recorded decreases in the volume of managed savings of different intensity.
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