Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mapfre SA (MPFRF, Financial) reported a solid growth in premiums, up 5.4% to EUR8.6 billion, with a nearly 6% increase excluding Life Savings.
- The Non-Life combined ratio improved to 94%, with significant reductions in claims and expense ratios.
- Net result increased by nearly 28%, reaching EUR276 million, with an adjusted ROE of 12.8%.
- Strong performance in Iberia, with a 66% increase in contribution to EUR121 million, driven by improvements in the motor combined ratio and diversified business mix.
- LATAM region showed excellent profitability with a 25% increase in total result to EUR118 million, supported by strong contributions from Brazil, Mexico, Peru, and Colombia.
Negative Points
- Currency volatility, particularly in Latin American markets, is affecting the top line, with a nearly 3-point drag on premiums.
- The California wildfires resulted in a significant claim, with a net impact of EUR85 million on MAPFRE RE.
- Life business premiums are down 1.5% in euros, impacted by currency depreciation, particularly the Brazilian real.
- In Brazil, premiums are down 12% in euros due to currency impact, with business volumes flat at local currency.
- The EMEA region, while improving, still faces challenges with a combined ratio significantly down from 124% to 112%.
Q & A Highlights
Q: How do you see premiums evolving in Brazil during the year? Do you expect a recovery in the next quarters, and what is your outlook on claims and combined ratio?
A: Jose Luis Jimenez Guajardo-Fajardo, CFO, stated that while it's challenging to predict due to recent volatility, they expect the combined ratio to remain stable, with potential deterioration. However, lower interest rates in the second half of the year could aid premium growth.
Q: What is the reason behind the strong evolution of premiums in the MAPFRE RE business during the first quarter?
A: Felipe Navarro Lopez de Chicheri, Corporate Director, explained that the first quarter saw a significant increase in gross written premiums, with a 7% growth in insurance business and a 20% increase in global risk. This growth is partly due to the renewal of programs in the first quarter, indicating some seasonality.
Q: Is it feasible that Mapfre's net profit could remain at similar levels in upcoming quarters despite the impact from the California wildfires?
A: Felipe Navarro Lopez de Chicheri noted that the California wildfires had an EUR85 million net impact, which is fully booked. The future performance will depend on the evolution of secondary perils and the North Atlantic hurricane season, but a normal year could still yield good results for MAPFRE RE.
Q: Could you explain the improvement in the Spanish auto combined ratio and whether there have been any reserve releases in the quarter?
A: Felipe Navarro Lopez de Chicheri clarified that there was nothing extraordinary in the first quarter. The improvement is due to a lower frequency of claims and the absence of additional reserving for personal injuries, alongside positive earned premium evolution.
Q: What is the impact of recent FX moves in the U.S. dollar and Latin American currencies on shareholders' equity, solvency, and earnings for the rest of the year?
A: Jose Luis Jimenez Guajardo-Fajardo mentioned that the impact is not significant and is consistent with past years. The company is accustomed to dealing with such fluctuations due to its geographical footprint, and the strong solvency ratio of 207% provides a buffer.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
