MAPFRE: Third quarter's nat cat events' impact on the group's income: EUR 176 million

7 December 2017 — Daniela GHETU
MAPFRE will disburse more than EUR 1.1 billion in compensation for the events that occurred in the third quarter of this year (hurricanes in the Caribbean and the USA, and earthquakes in Mexico). The estimated net impact on its income statement will be of EUR 176 million.

"I'd like to highlight MAPFRE's solvency and financial capacity to respond to our policyholders," MAPFRE chairman and CEO Antonio HUERTAS declared on the occasions of the latest Investor Day event held on December 5th. "The specific impact of these disasters will not affect the company's development. The organizational changes we have introduced in the USA, Eurasia and LATAM North will help us drive forward our strategy of focusing on profitable growth," he added.

MAPFRE's revenue in the first nine months of the year rose to EUR 21.3 billion, a 1.6% y-o-y increase. Premiums grew by 5.1% to EUR 18 billion, driven by business growth in Spain, Mexico and the reinsurance and global risks businesses. Net profit stood at EUR 445 million, a decrease of 22.3%, due to the costs stemming from recent natural disasters in both North America and the Caribbean, the estimated impact of which is EUR 176 million net. Excluding the effect of these catastrophes, attributable profit would have grown 8.6%.

These catastrophes (hurricanes and earthquakes) have affected both the Group combined ratio, which now stands at 98.7%, despite the severity of these events in scale and timing. Taking out the impact of these events, the combined ratio would have been 96.3%. It is important to note the progress in the reinsurance business, which contributed EUR 97 million to profits, with a combined ratio of 96.6%, as well as the strong growth of the business in Spain, and especially in profitability.

Equity closed September 2017 at EUR 10.8 billion, while shareholders' equity rose to EUR 8.8 billion and total assets at the close of September amounted to EUR 67.7 billion.

MAPFRE's investments totaled EUR 49.4 billion at the end of September. Of this amount, 54% corresponded to sovereign debt, while 20% was invested in corporate fixed income, with 9% in equity and mutual funds.

The Solvency II ratio at the close of the first half of this year was 205.6%, with 87% of top-notch (TIER 1) capital, reflecting the robustness and stability of the Group, which is supported by broad diversification and strict investment and management policies.

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