‘The insurance industry is evolving at a fast pace’ – David Curmi

“I hardly ever act alone,” says David Curmi,reflecting on his role as “one that provides clarity, direction, guidance and support to my team.” 

As CEO of MAPFRE MSV Life, David does not believe in making decisions alone – rather, he actively encourages those around him to challenge how he thinks to bring in diverse perspectives. “I like to invite disagreement as I think it’s healthy, and I enjoy having a mix of views and experiences,” he says.

His days are made up of short but effective meetings which allow the CEO to engage with his team, customers, intermediaries and regulators. “I believe in an open and candid relationship with all our stakeholders,” he maintains, adding that by leading by example, he intends for MAPFRE MSV Life to be a conversational brand, “a company that discusses, listens and that is easily accessible by all.”

Established in 1994, MAPFRE MSV Life has grown to become one of the largest financial services companies in Malta, with a balance sheet in excess of 2.5 billion euros. Jointly owned by MAPFRE Middlesea plc and Bank of Valletta plc, the company also forms part of the MAPFRE Group of Spain.

Having worked in the insurance industry for over 40 years, David reveals that it is its sheer complexity that continues to attract him. “Insurance has evolved into a very complex business and I find that very stimulating,” he says.

Crediting an “excellent management team” with helping him to resolve challenges, the CEO points to the current macro-economic and financial environment as one of the biggest challenges they face today. “I feel that the ‘low for long’ interest rate environment poses a serious risk to life insurance companies, by causing pressure on our solvency ratios and capital resources and limiting our ability to be creative and innovative in our product offerings,” David laments, adding that the other big challenge is the technological change perpetuated by COVID-19.

Indeed, change has been significant within the industry in recent years, the CEO reveals – most of which has been driven by regulatory changes. “The industry is also evolving at a fast pace in the wake of challenges and opportunities brought about by changing customer behaviours and consumption habits,” David continues, adding that the company strives to keep up with the pace of change in customers’ expectations.

In fact, the CEO notes, MAPFRE MSV Life has historically led the life insurance market in Malta. “We were the pioneers in introducing Bancassurance in Malta; we were the first Maltese insurance company to launch unit-linked products and, more recently, we were also the first in Malta to launch insurance-based personal and occupational pension schemes,” he says. And the secret to their success? Focusing on solutions rather than products, according to the CEO. “We always change the conversation from price to service. What is most important to us is the customer experience.”

Despite this, the business, as well as the insurance industry as a whole, have not been spared the turbulence and disruption of the COVID-19 crisis. “We are in the risk business, but the COVID-19 crisis was not foreseen by anyone,” David says, describing the crisis in insurance terms as a high impact exceptional adverse situation. “We’re not talking about the 2008 financial crisis, we’re talking of a much more severe crisis – one that hits insurance companies very badly, particularly life companies due to their long-term liabilities and guarantees,” he adds.

And while no one was handed an instruction manual on how to deal with this unprecedented situation, the team’s focus instantly shifted to two priorities. “Our first priority was protecting the physical health of our people – we are a people’s business, and without people, we can no longer run the business. The second priority was to protect the financial health of our company,” the CEO affirms, explaining that companies like MAPFRE MSV Life, who hold very large investment portfolios, are highly exposed to market risk, and were badly hit by the market meltdown towards the end of March.

“A crisis is when it is most important for leaders to uphold a vital aspect of their role: making a positive difference in people’s lives,” David says of his experience during this difficult time, and despite being concerned about what was going on, he viewed his role as one that needed to inspire, galvanise and show empathy and compassion. “In the circumstances it was also necessary that I make decisions amid uncertainty, and also empower others to make their own decisions and communicate effectively and frequently,” he reveals.

The situation also led the company to further encourage flexible working and modern employment practices, and at some points in 2020, this meant that over 90 per cent MAPFRE MSV Life employees were working from home. But this wasn’t the only change brought about by COVID-19, David says, adding the company also saw changes in customer behaviour, with more customers interacting with them digitally and online.

Indeed, the CEO believes that a crisis such as this one can present both danger and opportunity, and while the pandemic has been a dreadful experience for the global economy, and tragic for those who have lost loved ones, it has required companies to change and innovate at a much faster pace — a consequence he deems positive. “The pandemic has accelerated the speed with which our company has acted on innovations that we had been talking about for some time,” he says.

Looking to the future of the industry, David expects to see greater supervisory scrutiny as more regulations are expected to directly affect the life insurance sector. “The heavy agenda of regulatory change is likely to result in higher costs and distraction that could lead to damaging effects in areas such as product availability and consumer choice,” he maintains, noting a particular concern as IFRS 17, a new worldwide reporting standard which requires insurance companies to use a current discount rate to value liabilities. “Our indications are that compliance with this new reporting standard will require a major financial investment,” the CEO notes.

As for MAPFRE MSV Life’s plans moving forward, David reveals that in the coming years, the focus will be on profitability rather than growth, and on the proper generation of capital and its disciplined allocation and appropriation. Affirming that growth should be profitable and sustainable, the CEO goes on to highlight the company’s continued investment in information technology and innovation.

“In 2019, we initiated the replacement of our core life administration system. To this end, we selected Sapiens CoreSuite – a leading global provider of cutting-edge software solutions for the insurance industry – for our core and digital transformation project,” he explains, revealing that the first phase of implementation was completed after just 15 months, despite the interruption of the pandemic. “This first phase will consolidate our protection business onto a single administration platform whilst the next phase will consolidate our savings, investments and pension business offering,” he adds.

Looking ahead, David also lists digital transformation as one of the company’s key strategic objectives and says that, despite the disruption caused by COVID-19, in 2020, more than 60 per cent of applications for life insurance received were underwritten digitally without human intervention. “New digital tools are providing ways for insurance companies to reposition themselves as relatable, personal and conversational brands, and we want to be the first to do this in the Maltese market,” he concludes.

This interview was carried out and published prior to Mr Curmi’s appointment at Air Malta, and is part of a serialisation of 50 interviews with Malta’s top CEOs, featured in the recently released bumper edition of MaltaCEOs 2021 publication. Despite the many challenges of 2020, this is the largest edition to date.