Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mapfre SA (MPFRF, Financial) posted the highest level of profit in over a decade, with a net profit of EUR902 million, up 30% from the previous year.
- The company achieved a record EUR28 billion in premiums, marking a 6.6% increase at constant exchange rates.
- Mapfre SA (MPFRF) maintained a strong capital base with shareholders' equity up over 5% to EUR8.5 billion and a Solvency II ratio at 202%.
- The company proposed the highest dividend in its history, with a total payout of EUR590 million, reflecting a 55% payout ratio.
- Mapfre SA (MPFRF) demonstrated strong performance across various regions, with notable profitability in LATAM and North America, and a solid result from its reinsurance and global risk businesses.
Negative Points
- Currency depreciation, particularly in Latin America, negatively impacted growth figures, reducing the real growth rate to 4.5%.
- The auto business in Iberia faced challenges, with a combined ratio of 105.4% due to increased costs and changes in compensation scales.
- The EMEA region continued to be challenging, with losses reduced but still significant at around EUR30 million.
- The life business saw a decline in premiums by 5% in Iberia, affected by slower sales activity and exceptional issuance in savings in 2023.
- The company recorded a EUR90 million impairment of goodwill in Germany, impacting the overall financial results.
Q & A Highlights
Q: What are the expectations for the motor insurance portfolio in Iberia, considering the drop in the fourth quarter? Are you expecting stability in 2025, or will you continue to lose clients? What are the average increases in premiums expected for 2025?
A: Antonio Huertas Mejias, CEO: We remain optimistic about our portfolio retention capacity in Spain. We are adjusting premiums conservatively and adapting them on a bespoke basis. The portfolio loss of about 1% in 2024 was expected, as it involved profiles we don't want. We anticipate stabilizing in the first half of 2025. The average premium grew by 9%, and future adjustments will be based on market conditions.
Q: When will the motor insurance markets in Spain and the USA become profitable? What is the trade-off between premiums and policies?
A: Antonio Huertas Mejias, CEO: We are optimistic about the USA, where we have a reasonable size and a combined ratio of about 100, which is common in the mature and competitive environment. In Spain, we have seen improvements, but the market still needs to absorb impacts from increased bodily injury compensation scales. We expect further improvements in 2025.
Q: What is the impact of the Dana flash flood on the fourth quarter results in Iberia? Are there any other one-off events that affected the quarter?
A: Antonio Huertas Mejias, CEO: Dana was the biggest catastrophe in Spain, with an insurance impact of over EUR3 billion. For Mapfre, the direct impact was EUR34 million, which is residual and will not significantly affect our accounts.
Q: What are the future plans for capital management and expansion in EMEA? Are there any specific regions or bancassurance agreements of interest?
A: Antonio Huertas Mejias, CEO: We are focusing on Turkey, Malta, Germany, and Italy, with no plans to leave Germany despite challenges in the auto market. We aim to improve profitability and maintain strategic options. Our capital management will focus on strengthening alliances in existing markets like Brazil, Mexico, the USA, and Spain.
Q: What is the outlook for the combined ratio in the Agro business in Brazil, and how will new legislation affect the insurance market there?
A: Antonio Huertas Mejias, CEO: The combined ratio for Agro is very good, around 50-50-something. We expect 2025 to be a good year for Agro, supported by the Brazilian economy and private sector growth. New legislation and interest rate increases could impact funding, but we remain optimistic about the trend continuing.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
