There are three factors that determined the EUR 1.6 billion reduction in premiums, namely: (1) the impact of currency devaluations, particularly the Brazilian real, which resulted in total premium reductions of 580 million euros; (2) the Pemex two-year policy, worth EUR 445 million, which was issued in 2019; (3) the EUR 412 million reduction in Life-Savings premiums in Spain.
Earnings were also affected by this situation and the Group's result at the end of June was EUR 271 million (-27.7%). The result was strongly impacted by COVID-19 claims recorded in the Reinsurance Unit (EUR 87 million, gross), as well as by the earthquakes in Puerto Rico (EUR 83 million, gross) and Storm Gloria in Spain (EUR 22 million, gross). In the insurance units, COVID-19 is expected to have a neutral effect on MAPFRE, with a decrease in the frequency of Automobile claims, compensated for mainly by direct claims in Burial and Health.
- Revenue: EUR 13,277 million (-11.8%)
- Premiums written: EUR 10,983 million (-12.3%), of which:
- Iberia: EUR 3,978 million (-8.3%)
- LatAm: EUR 3,225 million (-21.6%)
- North America: EUR 1,116 million (-8.2%)
- Eurasia: EUR 776 million (-18.4%)
- Reinsurance: EUR 2,123 million (-5.1%)
- Global Risks: EUR 787 million (+38.8%)
- Combined ratio: 96.7% (+0.8 pp.)
- Solvency ratio: 177.2% (-9.6 pp.)
- Attributable result: EUR 271 million (-27.7%)
The Iberia Regional Area (Spain and Portugal) premiums in the first six months of the year amounted to EUR 4.0 billion (-8.3%). Spain remains the group's driving force in terms of earnings, with a contribution of EUR 218 million to overall earnings.
EURASIA Regional Area premiums stood at 776 million euros (-18.4%). In addition to economic stagnation arising from COVID-19, the sharp depreciation of the Turkish lira has also had a significant impact on this region's performance. This regional area returned to positive earnings, delivering a profit of EUR 23 million, with a highly significant improvement of close to 11 percentage points in the combined ratio, which stood at 97.1 percent.
In Turkey, premiums were EUR 182 million (-24.3%) and earnings amounted to EUR 14 million (compared to a loss of 3 million last year). In Germany, premiums grew to 215 million euros (+3%), while Italy, posted premium volume of EUR 181 million (-31.7%).
The Reinsurance Unit's premiums at the half-year close were EUR 2.1 billion (-5.1%), producing a negative result of EUR 48 million as a consequence of the cost of claims arising from COVID-19 (EUR 57 million), the earthquakes in Puerto Rico, and the effects of Storm Gloria in Spain.
Total assets were EUR 70.2 billion (-3.2%) as a result of the fall in stock markets, currency depreciation, and reduced activity.
Group investments stood at EUR 51.4 billion at the end of the first half of the year (-4.1%). The majority of these investments, 55.3% pertain to sovereign debt, 18.5% are in corporate fixed income and 4.8% are in equity.
The solvency ratio stood at 177.2% in March 2020, with 85.5 percent Tier 1 (highest quality) capital. These levels remain within the tolerance limits set by the Board of Directors, which will facilitate MAPFRE in dealing with this situation and allow it to take appropriate measures to reduce the consequences of this crisis.