Barclays analyst Alessia Magni has raised her outlook on Mapfre (MPFRF, Financial), moving the rating from Underweight to Equal Weight. The updated price target is now EUR 3.50, up from the previous EUR 2.30. Magni's more optimistic view stems from improvements in the Iberian market, particularly in the automotive sector, which is beginning to show sustainable margin enhancements. Additionally, there are expectations for continued strong performance in Brazil and other Latin American markets.
MPFRF Key Business Developments
Release Date: April 25, 2025
- Premiums Growth: Up 5.4%, reaching EUR8.6 billion; nearly 6% growth excluding Life Savings.
- Non-Life Combined Ratio: Improved to 94%, down nearly 2 points.
- Net Result: Increased by 28%, reaching EUR276 million.
- Adjusted ROE: 12.8%.
- Shareholders Equity: EUR8.4 billion.
- Solvency Ratio: 207% at year end.
- Iberia Contribution: EUR121 million, up 66%.
- LATAM Net Result: EUR118 million, up 25%.
- North America Net Result: EUR30 million, up 94%.
- MAPFRE RE Net Result: EUR48 million, with a combined ratio under 98%.
- Brazil Net Result: EUR62 million, with a return on equity around 26%.
- EMEA Combined Ratio: Reduced from 124% to 112%.
- Life Business Contribution: EUR70 million.
- Total Assets Under Management: Over EUR59 billion.
- Investment Portfolio: Nearly EUR46 billion, with a high share of government bonds.
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%.
