MAPFRE, in collaboration with the Chamber of Commerce, Enterprise and Industry in Malta, held a working breakfast to discuss the latest Economic and Industry Outlook report from MAPFRE Economic Research.
Gonzalo de Cadenas-Santiago, MAPFRE’s director of economic and financial research, shared the main conclusions of the analysis during a presentation at the opening session, in which the Spanish Ambassador to Malta, Consuelo Femenía, also participated. The analysis indicates that 2019 will give way to a gradual deceleration of the world economy, which will grow by 3.3%.
The event, in which Felipe Navarro, CEO of MAPFRE Middlesea (image on the left), also took part, featured prominent figures including Kenneth Farrugia, chief business development officer at Bank of Valletta plc, David G Curmi, CEO of MSV Life and Wilfred Kenely, CEO of the University of Malta’s Research, Innovation and Development Trust (RIDT, all of whom debated the repercussions of the forecasts of the report for Malta.
Even though an international slowdown is on the cards, the reports forecast for the Maltese economy suggested strong growth levels, in which scenario, further investment opportunities should present.
During the working business, it was further highlighted that even though there are likely to be more opportunities for growth for financial organizations, long-term risks existed due to the fiscal reform or changes in market supervisory structures at a European level.
In order to better diversify, the Maltese economy has the opportunity to invest more in research, development and innovation, from both the public and private sector perspectives, thereby meeting its European commitments for 2020.
The economic implications of ageing populations on public pension schemes that may push developed countries economies to raise the retirement age or limit pension benefits were also discussed in an insurance context. If current demographic trends persist, Malta’s public expenditure on pensions looks set to rise from 12.5 percent to 16 percent in 20 years time.
To mitigate the aforementioned, other developed countries are automatically enrolling young workers into a saving scheme when they first join the labor market, so as to lay the groundwork for their pension plans. Countries such as the UK have already put this into practice with very favorable results.
Attention was also drawn to the possibility that complex regulatory measures within the insurance industry are likely to increase in the future, in terms of both the complexity of the information delivered to the client, and the associated cost. In this case, the implications that these new measures may have on both clients and (potential) investors need to be taken into consideration.
The final topic of discussion related to Blockchain and its positive impact on insurers in the long-term. This technology was the driver behind the agile introduction in Malta of a new series of regulatory changes that sought to promote innovation.