MAPFRE growth boosted by Brazil and ‘green shoots’ finally spotted in Spain

Growth has slowed somewhat in Latin America in recent times and big risks and regulatory hurdles remain in the region. But Brazil, and to a lesser extent the wider region, still offers fantastic growth opportunities for international companies and their insurers at a time of still tepid growth in Europe. The opportunities and challenges presented to both risk managers and their insurance market partners by this fast-growing region will be discussed by a group of leading experts at Commercial Risk Europe's Risk Frontiers-Latin America seminar in London on 29 May. The event, held in association with Airmic, is free to risk managers. The boost to MAPFRE's results by its Brazilian business in particular capped off a positive quarter for the Spanish group and will be welcomed by the wider Spanish business market as it desperately looks for positive signs after such a tough period.hideDuring the first quarter of this year, for example, MAPFRE received welcome credit rating upgrades from the main rating agencies. Standard & Poor's, for example, raised MAPFRE SA's rating from BBB- to BBB, with outlook stable and did the same for subsidiary companies including MAPFRE GLOBAL RISKS, its growing large corporate insurance business. 'Green shoots' of recovery were reported in the company's core Spanish market. It remains very important to the group despite the rapid growth of its Latin American business. Latin America now accounts for some 33.3% of total group premiums, with Brazil taking the lion's share, against 40.3% for Spain and Portugal. Overall, the Madrid-based group reported premium volume of €5.96bn in the first quarter, up 1% on the same period last year. At the start of the year the euro appreciated against the currencies of the group's principal overseas markets and so deflated the growth. In constant-currency terms, premiums would have risen by 10%, explained MAPFRE. The majority of that growth was delivered by emerging markets with the Brazilian business reporting growth of over 17%. Another good growth market was Turkey, but the overall EMEA business reported a fall of 5% in premiums. Total group revenues reached €6.9bn (-0.6 percent) and net profit was €219m, a drop of 17.1%. The news from Iberia was good and, as noted above, will be welcomed in the Spanish risk and insurance market. The group's Spanish business recorded premium revenue of €2.63bn, which represents a rise of 7.8% compared to the first quarter of 2013. In Spain, premiums totalled €2.56bn, a 7.2% increase. "Some green shoots can be observed in Spain, and in the insurance sector, a change in trend at retail level has been registered," stated Antonio Huertas, MAPFRE's Chairman and CEO. Even better news came from Latin America. Premiums from Brazil reached €1.17bn, a 17.6% rise in local currency terms. Brazil currently contributes 18% of Mapfre's premiums and 12.7% of profits. In the LATAM South Regional Area (Argentina, Colombia, Chile, Ecuador, Paraguay, Peru, Uruguay and Venezuela), premiums amounted to €703m (-1.6%). Though this was mixed with strong organic growth in Peru (+18.9% in local currency terms), driven by a 'robust' performance in the motor line, said MAPFRE. LATAM South makes up 10.7% of group premiums and 9.3% of total group profits. Premiums from the LATAM North Regional Area (Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama and the Dominican Republic), which accounted for 4.6% of the group's business, reached €300.2m (-1.4%). In this area, which produces 5.6% of MAPFRE's profits, Mexico turned in 'strong' figures with premium volume of €198.3m (+1.6% in local currency terms). The North America Regional Area (Canada, the USA and Puerto Rico) recorded premiums of €486m in the first quarter, down 2% compared to the same period last year because of the depreciation of the dollar against the euro. This business now contributes 7.4% of Mapfre's premiums and 3.1% of group earnings. As noted above premium volume from the EMEA Regional Area (Africa, Europe-excluding Spain and Portugal-and the Middle East) amounted to €324.2m representing a disappointing -5%. The real bright spot in this business was Turkey. It delivered premiums in excess of €158m, which represented plus 16.5% in local currency terms. Malta, host to next months 5th Malta International Risk & Insurance Congress June 12-13, recorded premium revenue of €41.8m, representing an impressive 10.9% increase. Business in the APAC Regional Area (Australia, China, the Philippines, Hong Kong, India, Indonesia, Japan and Taiwan) grew by 60% to €23.2m in the first quarter. Premiums from reinsurance business reached €885.8m, an increase of 1.2% thanks in part to a 'benevolent' claims environment, said MAPFRE. Reinsurance makes up 13.6% of Mapfre's premium volume and 18.1% of profits. The group said that the results reflect its new structure, in force since January, which is 'aimed at adapting the entity to its scale and position as the most trusted global insurance company'. To sign up for the Risk Frontiers-Latin America seminar in London on 29 May please go to http://www.commercialriskeurope.com/events/calendar/risk-frontiers-london-2014 This event is free for risk managers and open on a paying basis to the rest of the market. The event is sponsored by MAPFRE GLOBAL RISKS and law firm Clyde & Co.

MAPFRE growth boosted by Brazil and ‘green shoots’ finally spotted in Spain

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