Antonio Huertas, 56, believes that the Covid-19 crisis will have a profound impact on society, from greater dependence on remote working to more environmental awareness, which he believes to be crucial. He also thinks that businesses should be more socially responsible, above all with those worst hit economically by the pandemic. He is calling for a national corporate agreement to give preference to job applicants under the age of 40 in order to address the fate of “the lost generation,” which has been subjected to two consecutive crises.
Question. When did Mapfre start the lockdown?
Answer. On March 16 we decided that we would all leave the offices and continue working from home. Within two weeks, more than 30,000 employees in 45 countries were working remotely. As an essential service in Spain, we maintained a minimum service with one office open in each province. We were relieved to see how the organization could serve its clients during confinement without too many problems, thanks to the wonders of technology. The personal challenge that I’m sure we all faced was organizing ourselves at home to guarantee the work got done while managing domestic life.
Q. Will remote work become the norm in Mapfre now?
A. We prefer to call it mobile work, which is how we always used to refer to it at Mapfre. This experience has been different, as there has been no choice but to telework all the time. We could not survive long-term like this, because we would lose the heart of our business. Our work is not just about people producing on an individual basis; we are part of a human chain that generates added value, which is very important, though difficult to measure. But we will undoubtedly continue to introduce it in our digital transformation projects.
Q. What is the downside of this situation?
A. Physical confinement leads to mental confinement, which ends up having a negative impact on human behavior, and that has to be dealt with, because we need to go out to understand what is happening in society, and also among our clients. We cannot be locked up in our homes permanently out of fear, even if it is technologically feasible.
Q. How do you manage leadership with your teams scattered?
A. By using a lot of technology. In my case, I have even organized a small recording studio at home so I can have an ongoing presence on social media, with weekly videos on LinkedIn and Twitter. I do it on Fridays and thousands of followers tune in and comment. I offer the most positive view possible with three or four key points from the previous days. It’s important to raise the troops’ morale. We also have a virtual meeting with the employees every 15 days when they ask hundreds of unfiltered questions, and that helps us see how workers are feeling, which varies from country to country – it is not the same in Turkey, Brazil, America or Spain.
Q. Will society be different after the pandemic?
A. There is no single society. The world is extremely diverse and what we see in Spain is different from what we see in other European countries or in Latin America, where the crisis has coincided with an economic situation and health system that was not in the best state to withstand the pandemic. However, I believe that this is a great opportunity for Spain, as it is the only country that understands Latin America well. We should help them build new, more egalitarian societies because sometimes the elites there do not show enough social responsibility. Companies such as ours can demonstrate that we are not only working toward an economic end, but also toward providing a social dividend, as has been apparent during this time.
Q. What measures are needed to restart the economy?
A. We should recognize what is required by each strategic sector; for example, tourism which, in the summer months, can represent 30% of GDP because it is the driving force behind other sectors, such as the hotel industry and lots of other services. We must also protect car factories so they will stay in Spain as they generate an extensive added-value chain. Just look at what is happening with Nissan. And then it’s important that the financial sector continues to function. This time, the banks must be the mechanism that maintains cash flow for individuals and businesses. We must also help those who have fallen by the wayside, because many will not be able to get back into work due to the number of jobs that have been lost.
Q. Who are the main losers in this crisis?
A. When it comes to employment, besides the self-employed and small- and medium-sized companies (SME), I am worried about the effect of the crisis on the generation that should now be starting to take over leadership positions. I am talking about the millennials, the most highly educated generation in history, who will end up being the first to be worse off than their parents. The previous crisis threw them abruptly out of the labor market, with unemployment rates of up to 50% in the youngest age bracket, and they have been suffering the consequences of that crisis for 10 years with difficulties returning to work, a high degree of precariousness due to the temporary nature of the work model, and lower salaries than previous generations. Now, once again, they are the first to be let go. In April – the first month to be fully impacted by the economic shutdown – 40% of the new unemployed were people between the ages of 25 and 44, practically the same generation, once again.
Q. What could companies do to alleviate this?
A. As a society, we cannot afford to dispense with the valuable contribution of any generation, because as well as being personally frustrating, it is a collective failure with a negative impact that multiplies over time and which ends up affecting everything, from a drop in the birth rate to lower pensions due to the gaps in contributions over a long period of time. A major national pact is needed to train and hire young, unemployed people – the millennials.
Q. Do you think that the minimum guaranteed income scheme is adequate to help those who have fallen by the wayside?
A. They must be helped for as long as necessary, and it must be a temporary support tied to training and job searches; vocational training must be given a boost so that these people can retrain and meet the new demands of the labor market. It is also clear that we must build the future together with Europe; without Europe, there will be no economic recovery. It is essential that we work together, with fiscal and budgetary consolidation; that we become more than just a union of traders.
Q. Will the crisis trigger an anti-globalization movement and a return to protectionism?
A. We have seen a number of calls for car factories to return to their countries of origin, but it would be a serious mistake to erect borders again. Europe is still the solution. We cannot fall into nationalistic regionalisms that divide us. We are very small and weak outside the European federal union.
I am worried about the effect of the crisis on the generation that should now be starting to take over leadership positions. I am talking about the millennials
Q. Has the pandemic left the world more vulnerable?
A. Yes, it seems as though we have gone back 100 years to a time when we were very weak, and to a world threatened on many fronts. But we also have science, technology, business and social development to protect us. However, the pandemic has shown us existing gaps such as healthcare and social protection. There are weaknesses in Europe that must be corrected, but there are also many opportunities to develop business and improve the quality of life for its citizens. One example is insurance, which is a sector that is always expanding when society becomes aware of its weaknesses, because we provide the guarantee that allows people to live with confidence and security.
Q. But the insurance sector suffers when the economy collapses and interest rates are low.
A. It is true that it is more difficult to develop in such circumstances, and also in a less-stable political environment. What we are demanding is to work in a predictable, reliable environment with clear rules and within the social market economy and free entrepreneurship, in order to create wealth. We must avoid making businesses and citizens feel insecure.
Q. Are you uncomfortable with this government?
A. This government has emerged democratically from the ballot box, and it is based on legitimate agreements that must be respected. It is facing what is possibly one of the most difficult challenges in our history and perhaps precipitously, because it had only been in power for a few weeks when it had to decide how to manage the crisis. Those of us who have to make decisions on a daily basis know how difficult this can be. We must all recognize that things could be done better and we must be more sensitive to approaching and understanding each of the sectors involved. The break with mental confinement is good, as it helps those in government know what people on the street are thinking.
Q. There was controversy in the insurance sector at the beginning of the crisis because policies excluded coverage in the event of a pandemic.
A. The sector has discussed how far the role of insurance companies goes. We must be aware of the conditions of our contracts in order to estimate costs; there has to be predictability. Although the pandemic clause existed in many contracts, we looked at it and within a few days decided that given the situation there was no point in applying it. Besides, the insurance sector has created a free solidarity fund worth €38 million to protect healthcare workers while, in response to the government’s mandate, we made all our health resources available to the authorities. The situation was new and not easy to sort out.
Q. What about insurance against the virus in the future?
A. The situation will be different. Mechanisms must be established to define what can and cannot be protected by private insurers and also to facilitate a public-private partnership framework to provide protection in any catastrophic situation and thus prevent it from depending on the will of one or the other. This is an international debate that extends beyond our borders. We must define the extent of the insurer’s role in order to estimate costs and avoid bankruptcies in the sector. I do not believe that the pandemic will be excluded; on the contrary, we will increasingly include more protection so that people feel safer. As insurers, we will have to be more transparent and communicate more clearly to clients what situations are covered.
Q. Will the price of insurance policies go up?
A. Just because new health insurance is coming in, doesn’t mean that prices will go up. It could be like the situation with vehicles, where there is civil-liability insurance, which is identical throughout Europe and with very similar prices for all types of vehicles because the protection schemes are compulsory. New, more universal insurance models do not mean higher prices or no protection for the most vulnerable.
We should be more united and help those who are having the worst time of it. Those of us with jobs and in good health have nothing to complain about
Q. Would you advise complementing access to public healthcare with private insurance?
A. In Spain, we have the best public-health system in the world, with universal access that guarantees all citizens the same rights. There are those who are more cautious for personal reasons and who can afford private insurance, but we must guarantee the coexistence of the two systems, the private and the public. We do not necessarily have better protection because we are in the private system – a system whose collaboration with the public system in this crisis has been exemplary.
Q. Should we be increasing investment in public health?
A. It is an absolute necessity and that is where Europe is heading. We will never be totally covered for every eventuality, but public services must guarantee massive protection to the public. This crisis has shown that 17 different health systems [in Spain, healthcare is devolved to its 17 regional governments] are not the most effective way to coordinate a pandemic. Coordination must be improved.
Q. Some have compared this situation to a war. Do you agree?
A. I don’t think it’s been a war for the insurance sector or for society, though it is true that a crisis that could hypothetically reach 40,000 deaths in Spain alone is terrible. But there is no enemy. We should be more united and help those who are having the worst time of it. Those of us with jobs and in good health have nothing to complain about.
Q. The next big global challenge is the environment. How will it affect insurance companies?
A. It’s not the next challenge, it’s already here and we’re working on it. This crisis has raised people’s awareness of the issue, although in the short term we are focused on the pandemic. We have to keep talking about the [UN’s] Sustainable Development Goals and change direction both economically and socially to protect the natural environment and improve how the urban and rural worlds coexist. We must be more demanding when it comes to getting rid of carbon emissions, and companies must be more committed to the communities where they operate. This is a great challenge for insurance companies because natural disasters are becoming more frequent, and covering them is a major economic challenge for both citizens and governments.
“Insurers have not had solvency problems”
A. In the Solvency II stress tests, the possibility of a pandemic was already posed and Mapfre passed with flying colors. As far as I know, no insurance company has gone bankrupt or has liquidity problems because of the pandemic. We are very resilient and counter-cyclical.
Q. Is Mapfre planning to have staff on furlough?
A. We are not planning to cut jobs in Spain because of this crisis.
Q. And will the 2020 dividend be suspended?
A. Mapfre has 187% over the legal minimum regarding solvency, which is one of the highest in Europe. It is the same with liquidity – there is €2.7 billion in liquid assets. We will be prudent. We will wait a few months to decide on the dividend for 2020. After the summer we will take the decision, but we still intend to approve it if we meet the necessary solvency and liquidity conditions, as it is hoped.
Q. Despite all the current uncertainties?
A. We have around 180,000 shareholders, many of them small savers for whom the dividend is a major help. We have not received any public aid and I think it is fair to meet our commitment to the shareholders, without risking the financial sustainability of the company.
English version by Heather Galloway.