The outstanding claims reserves established in 2002 have maintained a very satisfactory level of sufficiency, confirming the effectiveness of the statistical model used by MAPFRE MUTUALIDAD to calculate such reserves. The adjustment to the new mortality tables of the cost of the outstanding compensation payments under the form of annuities, which in accordance with applicable legislation could have been scheduled over thirteen years, was charged fully against the results of 2003, thereby increasing the reserves by more than _6 million. The outstanding reserves for personal injury claims affected by the amendments in the legal requirements concerning the adjustment of such claims introduced by Law 34/2003 dated 4 November were likewise fully appropriated.
In 2003, work was carried out to develop a new set of motor insurance tariffs, to become effective on 1 January 2004, that unifies those used by all SISTEMA MAPFRE companies. This will lead to substantial improvements in their sufficiency, fairness and competitiveness, and will also make the underwriting more efficient and easier. All technical aspects relative to the transfer to MAPFRE MUTUALIDAD of the Motor insurance portfolios of MARES and MAPFRE AGROPECUARIA were also reviewed.
Finally, a breakdown cover for second-hand vehicles was introduced and made available on a trial basis exclusively to vehicles sold by MAPFRE MULTICENTRO DEL AUTOMÓVIL.
Sales initiatives
651,521 new policies were written, a 14% increase over the previous year, and 84% of these corresponded to motorcars. The average premium for these policies grew 5% over the previous year to _574 per vehicle. The net increase was 343,146 policies and at the end of the year 4,360,224 vehicles were insured. Nearly 18% of all vehicles registered in Spain in 2003 were insured by MAPFRE.
Advertising and contact with mutualists
All the advertising material of the Motor Insurance Operating Unit has been redesigned, by adopting a closer and more uniform approach to the client backed by the slogan "If you think about a car, think about MAPFRE". The company continued to be involved in the main domestic motor shows, and it had a notable presence at the ‘Salón Internacional de Barcelona’. 57 sales initiatives and more than 200 local advertising campaigns were carried out.
Claims management and services
During 2003 the restructuring of the Claims Area, which began at the beginning of last year, was completed and the basic objectives established in connection with the specialisation of claims officers, training and claims settlement were achieved. During the year, a total of 3,024,262 claims were handled and the following points should be borne in mind in order to appreciate the work carried out:
› In Property Damage 2,784,295 claims were handled, 89% of which have been settled. Plans to concentrate claim filings at the National Claims Centre and in the Multi-Regional Centres have progressed and a total of 1,947,913 filings were processed there, representing 64% of all claims handled by the Company. The fight against fraud has continued: 16,137 cases were detected and rejected, leading to savings of over _35 million.
› In Personal Injury 232,487 claims of injured persons were handled, of which: 2,502 related to deaths; 137 to serious injuries; 94,370 to injuries of varying severity; and 135,478 to claims to meet payment of medical expenses. Within the year 72% of the claims were settled, by reaching amicable agreements in 48,883 cases, thereby speeding up settlements to the victims or their heirs in 85% of the claims without resorting to legal proceedings.
› In Legal Defence there were 307,085 claims against third parties, of which 236,021 related to property damage and 71,064 to personal injury, with settlement of 83% and 68% of the cases, respectively.
In order to carry out the activities detailed above:
› The 414 adjusters of MAPFRE MUTUALIDAD handled 968,043 assessments, of which 45% were settled in our Adjustment and Quick Payment Centres. .
› The medical and physiotherapy personnel of MAPFRE MUTUALIDAD’s Medical Service, which has 10 centres equipped with a consultation, radiography and rehabilitation facilities, treated 50,644 injured persons and rehabilitated 3,234 of them, with a total of 61,162 consultations.
› The Legal Services staff of the various regional sub-centres directed, monitored and assessed the performance of lawyers and solicitors who handled 111,192 claims.
In Roadside Assistance a total of 868,081 cases were taken care of, of which 79% related to breakdowns, 15% to accidents and the remainder to other services, a 17% increase over the previous year. It is worth noting that 4,781 cases involved medical attention.
The ‘Línea MAPFRE Autos’ call centre, which continues to be one of the most popular services with both our mutualists and the distribution network, handled 6,376,012 calls, a 15% increase over the previous year. Roadside assistance continues to be the most sought-after service, accounting for 74% of all calls.
Training
Training was reinforced devoting specific attention to those employees most closely involved with the technical and sales organisation, for which purpose training sessions were scheduled and attended by 6,926 persons. In order to make this possible, the involvement of those responsible for implementation, training and quality control in the different regional sub-centres was fundamental.
Several manuals were regularly updated and sales guidelines were prepared to meet the requirements of the Territorial structure.
Finally, the e-learning pilot scheme carried out in the Renting training course should be mentioned as it has given positive results that will enable us to continue with this dynamic, flexible and highly effective system.
BREAKDOWN AND EVOLUTION OF DIRECT AND ACCEPTED PREMIUMS
Branch PREMIUMS % VARIATION
2003 2002 2001 03/02 02/01 01/00
NON LIFE
Motor civil liability 1,043.3 963.9 851.1 8.2 13.3 21.2
Motor other risks 485.0 443.9 397.4 9.3 11.7 16.5
Occupants 62.7 60.9 55.9 3.0 8.9 14.3
Assistance 107.4 92.5 76.0 16.1 21.7 18.6
Civil liability 66.6 56.9 42.8 17.0 32.9 20.2
Privación permiso de conducir 16.1 12.8 9.2 25.8 39.1 35.3
Other 8.6 8.1 5.7 6.2 42.1 50.0
TOTAL1,789.7 1,639.0 1,438.1 9.2 14.0 19.6
Figures in milion of euros
OTHER SIGNIFICANT ITEMS
ItemAMOUNT % VARIATION
2003 2002 2001 03/02 02/01 01/00
Management expenses 378.7 338.3 283.7 11.9 19.25 8.6
Claims 1,234.4 1,162.1 1,067.0 6.2 8.91 12.7
Net investment income 86.4 74.9 70.5 15.3 6.24 (30.1)
Result before tax and minority interests 256.6 156.8 121.9 63.6 28.63 23.9
Result after tax and minority interests 200.8 120.3 98.1 66.9 22.63 18.6
Figures in milion of euros
STAFF Category 2003 2002 2001 Managers 988 671 497 Clerical staff 1,910 1,941 1,877 Commercial staff 9 73 121 Other 528 608 586 TOTAL3,435 3,293 3,081
Information and organisational systems
In 2003 a number of projects were developed, some of which produced tangible improvements during the year, while the remainder established the basic strategies and guidelines to be followed in 2004. The adaptations concerning the revision of the 2004 tariffs, which will unify the tariffs of all Motor portfolios in SISTEMA MAPFRE, was the most important development.
In the area of business support applications, the following applications came into operation: cancellations prevention, sales information systems and budget management. In the Claims area, the centralisation of the servers of the regional sub-centres in the Majadahonda EDP centre made it possible to merge the TRAMES subsystems into a single application, thereby giving greater potential and flexibility. Important operational improvements or new applications were also implemented in the software used by ‘Línea MAPFRE Autos’, in connection with the Internet branch.
With regard to basic infrastructure and technology, the new platform for delegates (PDM), which replaces the previous single employee platform, is important.
As far as new business areas are concerned, the development of business and accounting applications for MAPFRE RENTING, CLUB MAPFRE and MULTICENTRO DEL AUTOMÓVIL are worthy of mention. In the course of 2003, work began on adapting these applications to SAP, which will be the accounting system common to all of them.
The Business Continuity Plan should be mentioned as a project of special note, the two first stages of which have been completed: definition and identification of processes, and definition of action plans.
Substantial sums of money have also been spent on projects that will become fully operational in 2004, such as TRON21, SIRED and the Review of Information Systems.