Nov 2013// Luis Bodaño, our Personal Insurance Manager, discusses the presence of Spanish companies abroad in relation to Personal Insurance.
Are there opportunities as a result of the current crisis in Spain?
In our current environment, many economic variables continue to plague the country and it’s not easy to answer affirmatively, but the truth is that yes, some opportunities can be found. It is not a straightforward answer though, because the opportunities are not found within Spain itself, they are mainly concentrated beyond our borders.
One particularly striking indicator is the result of the trade balance. According to information from the Trade Office, during the period from January to July, sales abroad increased by 7% over the same period of the previous year, and reached an all-time historic peak of €138.583M. In contrast, imports were down by 3.1% than in 2012 (145,194.1 million). These figures show a trade deficit of 6611.1 million, an improvement of up to 67.5%. Between January and June last year, the negative difference between exports and imports was 20,334,000.
Spanish companies are selling more abroad and improving the trade deficit.
These figures confirm the fact that Spain has an increasing international presence. And this has not happened as a result of increased expansion but rather as a result of necessity. In other words, many companies that have survived the crisis are those that have already ventured beyond Spain. We are not just referring to large sized companies but also small to medium sized companies embarking on new challenges in other countries.
And does this affect us in the insurance business?
“Yes, primarily because we must offer solutions to our customers´needs”. More multinational programmes are required, as well as knowledge of local legislation etc.
And specifically to Personal Insurance?
More and more Spaniards are crossing our borders working with their companies in different countries. These are normally temporary trips abroad of people who are normally based in Spain; i.e., they have not permanently moved abroad. We are not referring to emigrants here, but people who work with a Spanish company and have to spend certain periods of time abroad, either alone or with their family. They will also travel back to Spain on a regular basis.
This fact leads to a number of risks that must be covered. This is a demanding group, as they are employees who must travel for work purposes and they need the best conditions.
The insurance market is looking for solutions to these needs by means of a wide range of products including death coverage, disability, health care assistance, repatriation, etc.. and can be grouped into three sections: Risk (Life / Accident) Business Travel (Business Travel) and Expatriates.
Another revealing statistic: in 2008 the number of business trips was 2.1 million and increased to 2.9 million on 2012. This percentage increase is particularly significant during Spain’s economic crisis.
As the type of company that goes abroad has expanded, frequent destinations have also increased. Destinations are not limited to Latin America; it is also increasingly common to find Spanish operations in Asia, Africa and Eastern Europe.
It must also be noted that not just senior manager and skilled technicians who go abroad, there are also employees of any profile.