San Basilio sees margin for improvement with regards to the current rate adequacy in general. “We’ve seen some positive trends in past couple of years, and in some areas of business, particularly large corporate industrial etc., but they are still low in many markets and niches, especially considering frequencies and increased complexity. The rate increases seen on the direct side have not fully transferred to the reinsurance industry”, he said.
Asked about opportunities to deploy capital right now, San Basilio explains that “MAPFRE RE is not opportunistic: our support for our traditional client base is to be maintained. We can still find opportunities in many markets. We’re not shifting radically but we have opportunities in almost every region”, he explained.
Regarding significant premium growth in the first half, he detailed that “it comes from the price movement we saw in the business written in 2020 -primarily price increase, with some increased exposure where we saw good opportunities and partners wanted us to grow with them. I would say the growth would be probably 70% price and 30% exposure”.
About rate momentum moderation, in his opinion, even though prices have still improved, in 2021 it has definitely slowed down each quarter. We have not seen price reductions, and that is a general phenomenon. However, results are still under stress and some of the areas more reluctant, when talking about price hardening, like continental Europe, have seen a substantial increase in claims, particularly Cat events, and this will have an impact in pricing for 1.1. We can’t allow the price momentum to slow down even further”, he noted.
As a strong buyer of retro, MAPFRE RE’s long-term strategy “remains unchanged”. “We are a boring company, and that’s good news”, he said referring to its solid panel of partners. “We are consciously managing the volatility we bring to the MAPFRE Group, and our retro protections are built with this in mind, obviously looking at market cycles, but unaffecting the long term strategy”, declared San Basilio, who serves as Chief Underwriting Officer for RE since 1st January, held previously the position of European regional director based in London and worked as underwriter in London, Manila, New Jersey, and Madrid.
