Mapfre Global Risks posts strong result, but reinsurance unit remains in the red

Mapfre has reported a big increase in premiums and earnings at its corporate risk unit in the first nine months of 2020, although Covid-19 and catastrophe losses pushed Mapfre Re into the red. Mapfre Global Risks posted a positive result of €6m in the first nine months of 2020, a 238.6% increase on the same period last year. The combined ratio improved 13.4 percentage points to 98.1%. Mapfre said the “strong result” at Global Risks was supported by pricing improvements and “very substantial underwriting measures”. The Spanish insurance group’s corporate unit also posted a 30% increase in premiums in the first nine months of 2020, at just over €1bn. However, the group’s reinsurance business Mapfre Re produced a negative result of €26m, mainly due to an “influx” of Covid-19 claims and an increase in catastrophe frequency. Mapfre Re was hit by large losses of €302m in the first nine months, compared to €166m in the same period of 2019, exceeding the full-year budget. The business was also affected by the high frequency of mid-sized events during the third quarter. Covid-19-related claims at Mapfre Re totalled €81m in the first nine months, of which €71m were from business interruption. The reinsurance result was also affected by higher natural catastrophe claims, including a €32m loss from earthquakes in Puerto Rico, €28m from the US derecho storms and €30m from the Beirut port explosion. Reinsurance premiums were 3% lower at €4.2bn during the nine-month period. Mapfre group earnings were down almost 3% in the first nine months of the year to €450m. The pandemic significantly reduced revenues on the back of lower economic activity and currency depreciation. But the impact of Covid-19 also improved the insurance margin in non-life business, with a drop in motor claims offsetting an increase in lines affected by Covid-19. The group posted an almost 12% reduction in premiums to €15.6bn during the first nine months of 2020, while non-life premiums declined 8% to €12.4bn. In Mapfre’s largest market of Spain and Portugal, premiums declined 11% to €5.3bn, although non-life business grew 1% to €4bn. This reflected a 7.5% increase in commercial lines premiums, as well as a good performance in health and homeowners. Revenues in Italy declined 21% and grew 4% in Germany. Group insurance earnings rose 7.5% to €610m in the first nine months, with the combined ratio improving by 1.1 percentage points to 95.2%, reflecting the positive impact of lower motor claims. In Spain and Portugal, the insurance result declined 4% to €334m, although the combined ratio improved to 92.5%. In these countries, the motor combined ratio improved 9.6 points to 83.7% as a direct result of reduced mobility during lockdown. The Spanish insurer also said it will pay an interim dividend of €0.05 gross per share for 2020. The agreement was reached after having “given due consideration to the recommendations of the supervisory bodies”, Mapfre said. The company will have paid out a total of €416m in shareholder remuneration in 2020.

Mapfre Global Risks posts strong result, but reinsurance unit remains in the red

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