FINANCE | 24.03.2021
“The Solvency II review needs to boost insurers’ ability to invest in sustainable assets”
Companies’ commitment to sustainability has accelerated as a result of the pandemic, and this concern has also grown among European authorities. It is of major significance that the Brussels-approved Next Generation EU plan will focus on two key issues: the digital and sustainable future.
Antonio Huertas, Chairman and CEO of MAPFRE, spoke about the matter during his speech at the Invertía Finance Observatory. In his view, and this is something that is being discussed within the Pan-European Insurance Forum (PEIF), of which MAPFRE is a member, progress needs to be made in public- and private-sector collaboration and mechanisms need to be prepared for insurers to increase the effect of investments that are based on public initiatives. However, as he stated, “there is concern that the review being carried out on Solvency II may limit that capacity if capital requirements are ultimately increased.” “The Solvency II review needs to boost insurers’ ability to invest in sustainable assets,” he said.
In this sense, Huertas gave a recap of the route already taken by MAPFRE. In the specific field of socially responsible investment (SRI), he showed that financial profitability is not incompatible with social profitability — and in fact that the opposite is true. By way of example, he cited the MAPFRE AM Good Governance fund, which rewards good corporate governance, and which closed last year as one of the best in its category with an increase of 28 percent. He also highlighted MAPFRE AM Inclusión Responsable, the only social fund and one cited by the UN as an example of best practice, whose portfolio includes companies that pay particular attention to including people with disabilities within the workplace. “Every investment must have a financial return, but in the sustainability environment that we are currently navigating, these investments must also have a social purpose,” he added.
The MAPFRE Chairman and CEO welcomed the new Sustainable Finance Disclosure Regulation, “which represents a major change in terms of transparency and improves accessibility for investors who wish to invest in ESG assets.” He went even further and advised that, in addition to investing with Environmental, Social and Corporate Governance (ESG) criteria, “it is extremely important to measure the social impact of that investment” — in other words, “making sure that these investments end up improving people’s lives.” Huertas noted that MAPFRE has been working toward this goal for several years alongside the University of Siena.
In the area of pensions, and beyond sustainable finance, he recalled that, unlike the Coen brothers’ famous film “No Country for Old Men,” “Spain is indeed a country for the older generation.” In this sense, he also recalled that longevity is leading us to a scenario in which those over the age of 65 or 67 make up almost one third of the population. Even if the active population achieved full employment, it would be impossible for 30 percent of the population to fund 70 or 80 percent of the economy. That’s why Huertas insisted that the rights already generated must not be limited, as has been done with the reduction of tax incentives, but should instead “open up new ways for workers, which includes myself, to have alternative sources of income within 15 years.”
In addition, he highlighted the importance of the bancassurance model, which is used often at MAPFRE despite its recent split from Bankia, and reached out to the Spanish government to support the vaccination effort with the services of companies such as MAPFRE.