Mapfre Global Risks posts loss and 123.5% combined ratio as losses take toll

Mapfre Global Risks, the Spanish insurance group’s operation dedicated to the large-corporate market, posted a loss of €19.2m in 2019 and a combined ratio of 123.5% as several big losses took their toll. But its parent group posted a healthy set of results. Mapfre Global Risks’ combined ratio rose by 31.5 percentage points during 2018. Its 2019 loss follows a €24m profit the year before. Mapfre said the unit’s 2019 numbers were heavily affected by several large claims, with a net cost of €27m. Mapfre Global Risks also saw total premiums fall by 9.7% in 2019 to €1.06bn. But Mapfre said this was primarily due to transferring European facultative business to Mapfre Re as part of major restructuring, and was mitigated by “strong” rate increases on its retained business. In March, Mapfre Global Risks’ insurance and reinsurance activities were transferred to Mapfre Re and Mapfre Espana. But the unit continues to underwrite large and industrial and commercial risks on a global basis, and remains committed to the business. In essence, Mapfre Global Risks now operates in tandem with the group’s various insurers to manage the large-risks business. But it is now focused on technical aspects, handling claims and providing services. The issuing process is carried out by the group’s companies around the world and reinsured by Mapfre Re. Mapfre said the restructuring has not had a significant impact on its 2019 group results, and explained figures for Mapfre Global Risk in last year’s accounts are on a like-for-like basis. Mapfre Group’s net earnings rose 15.2% in 2019 to €609m, with revenues up 7.1% to €28.47bn. Premiums were up 2.2% to €23.04bn. The company said this was in part due to a “solid” performance in Spain, LATAM north and reinsurance business. Non-life revenue was up 2.9% to €17.55bn, with its combined ratio the same as 2018 at 97.6%. Mapfre said its 2019 group results were heavily impacted by €147m of nat cat losses. This compares with €108m in 2018. Last year, TyphoonsFaxai and Hagibis in Japan cost the company €107m, the riots in Chile €24m and damage from heavy rains and storm in Spain €17m. But insurance business saw profits increase 17.7% to €806.4m, with a combined ratio of 96.5% and premiums up 3% to €19.29bn in 2019. In the Iberia region, premiums increased by 0.8 percent to €7.72bn with profit up 3.6% to €498m. Its combined ratio was 94.4%. Earnings rose 36.9% in LATAM to €214.9m, with the combined ratio falling to 94.4% and premiums up 9.6% to €7.55bn International insurance business, which includes the US and Eurasia, saw profits almost double to €93.7. Its combined ratio fell a touch to 102.3% and premiums were down 3.9% to €4.03bn. Mapfre’s reinsurance unit saw earnings almost halve to €77m in 2019, as its combined ratio increased 3.3 percentage points to 99.2%. Reinsurance premiums were €4.52bn, up 19.4%. Mapfre also took a goodwill write-down of €66m for Mapfre Asistencia subsidiaries. “Due to the lower expectations for future profits in the United Kingdom, as a result of a complex socioeconomic environment and the foreseeable slowdown of the economy from Brexit, the decision was made to write off the goodwill of Mapfre Asistenica companies in the country, for the amount of €48.4m. Further, in the framework of reducing non-performing business in the United States and Canada, the goodwill allocated in these countries was reviewed, which in turn led to a goodwill writedown for the amount of €17.2m,” the company explained.

Mapfre Global Risks posts loss and 123.5% combined ratio as losses take toll

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