The insurance sector in Spain makes a positive balance of the year: we just learned that it has grown by 4.65% and has continued to make progress in its transformation, adapting to a context characterized by major economic and financial challenges worldwide. The post-pandemic recovery we wanted, fueled by European funds, has been altered by the war in Ukraine, supply chain tensions, inflation and, in the specific case of car insurance, a natural increase in accidents. the rate derived from increased travel. To this we must also add the impact on the costs of insurance companies that inflation itself has had and other regulatory changes. Thus, we enter a new fiscal year with many unknowns to be resolved, but with the prospect that there is room for continued growth if we take advantage of opportunities to mitigate the factors of instability.
In 2023, still high inflation will continue to put pressure on insurance companies’ costs. Mobility is likely to continue to grow and, with it, the number of requests. In addition, Spain has the oldest mobile fleet in Europe, with the most polluting and least safe cars. Two figures: in 2022 long-distance road movements increased by 3% compared to 2019; In the same period, for every new passenger car registered, 1.4 cars over 10 years old were sold.
The economic situation in the coming months will encourage customers to be more demanding in comparing offers and will encourage them to take out insurance with less coverage, understandable attitudes, which we are already responding to with a modular offer and adjustable. At the same time, it is expected that the increase in interest rates, to the extent that it is preserved in time, will bring benefits to the financial results of the companies, eliminating part of the pressure on the technical result. However, in auto insurance that positive impact will come later than in the life business.
In this context, companies that have invested in making our processes more efficient and have adapted our technology to the reality of the market will have better tools to protect our profitability, beyond strong price increases, gaining attractiveness for our customers and sustainability. short term.
Facing the future there are a number of keys that are very important. Mobility is undergoing a profound transformation, along with it the car market and therefore the car insurance market. A recent report from Inese showed that the rate of driving away customers increased to 10% in the third quarter of 2022, breaking the downward trend that had been observed since the beginning of 2017. What were the reasons? The main one was economic, although others, such as changing mobility habits, had a significant impact. For example, carsharing, which has tripled its offer since 2019. Another is changing the type of vehicle in the parking lot. While registrations in general have fallen in Spain by 5.4% in 2022, those of electrified vehicles (100% electric + plug-in hybrid) increased by 20.9%, according to data from the National Association of Vehicle Dealers (Ganvam).
The trend shows that we will own fewer and fewer cars, that the collaborative economy will offer new solutions and that older vehicles will necessarily have to be replaced, responding, among other things, to a sustainability regulation that aims, logically, reducing CO2 emissions. In Europe this is the way. In its objective to reduce greenhouse gas emissions by at least 55% in 2030 compared to 1990 and to achieve climate neutrality by 2050, the European Commission has proposed a new challenge to reduce CO2 emissions from cars of passengers and 100% vans by 2035. This means that from 2035 it will no longer be possible to market passenger cars or vans with internal combustion engines in the EU.
In the end, the big trends that are marking the future of the world economy and that are redefining practically all sectors, will also mark the future of insurance. Among them, digitization, the great imperative. Thanks to technologies such as cloud computing, we will be able to work in a much more agile, efficient and fast way with less dependence on our aging infrastructures and the support of collaborators. Hand in hand with data and analytics, we can increase the accuracy of our risk models and claims prevention, developing more personalized, predictive and evolutionary insurance. This will also be driven by 5G and the growing connectivity of vehicles which is creating a huge amount of data.
All this should serve to achieve a greater customization and efficiency in the relations of the insured with the subjects: in products that fit in price and coverage; in being present in the necessary channels, giving access to all, leaving no one out, applying technology intelligently. And always at the service of the people.
Our business must be sustainable to survive in the future. A healthy, efficient and profitable business is one that is able to transform quickly and generate a positive impact. A business that attracts and cares for talent and is exemplary in its decisions. This is our reality. We are once again heading into a challenging year, but with the right tools to successfully bring it to a successful conclusion.
Juan Miguel Estallo is the CEO of Liberty Seguros in Europe
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