MAPFRE posted revenues of just under EUR28 billion for 2017, which represents a 3.3 per cent increase over the previous year, while premiums grew 2.9 per cent to almost EUR 23.5 billion.
The Group’s net profit was EUR701 million, down 9.7 per cent due to the extraordinary cost of the natural disasters that occurred in 2017, with a net impact on earnings of EUR126 million. This does not include the cost assumed by MAPFRE RE since it is regarded as ordinary in its line of business.
“Very few companies are capable of absorbing such extraordinary catastrophic risk as we witnessed in 2017 into their results, which in MAPFRE’s case, consisted of handling two earthquakes and three hurricanes. Closing the year with earnings in excess of EUR700 million is clear proof of MAPFRE’s capacity and solvency. It also demonstrates the fruits we are reaping from our profitable growth strategy, which compensates for these extraordinary events,” says Antonio Huertas (pictured), MAPFRE’s chairman and CEO.
Business was particularly good in Spain, while reinsurance performed remarkably well, maintaining an excellent combined ratio (94.8 per cent) and contributing EUR163 million, in spite of the impact of the catastrophes. Profitability also increased in Turkey, Peru, Colombia and Italy.
Equity amounted to EUR10.5 billion, while shareholders’ equity closed the year at EUR8.6 billion, slipping 5.6 per cent mainly due to the depreciation of currencies against the euro (EUR639 million). At the end of 2017, total assets amounted to EUR67.6 billion euros.
The combined ratio stood at 98.1 per cent, with the positive performance in Spain and the regional areas of LATAM North and LATAM South being worthy of mention. Extracting the impact of the disasters, the combined ratio would be 96.9 per cent, 0.5 percentage points better than the previous year.
Group investments totalled EUR49.8 billion at the end of 2017. The majority of these (55 per cent) corresponds to sovereign debt, while corporate fixed income accounts for 19.2 per cent, with equities and mutual funds accounting for 8.1 per cent. It is important to underscore the quality of these investments, with 24 per cent of the total holding a credit rating of AAA, AA or A, and 64 per cent holding a BBB rating. In 2017, the Group also invested a total of 292 million euros in alternative investments.
At the end of September 2017, the Solvency II ratio stood at 189.4 per cent, compared with 205.6 per cent in June, with 93 per cent high-quality capital (TIER 1). This decline is due principally to the redemption in July of the subordinated debt issued 10 years earlier. In this respect, it is important to note that the solvency ratio remains both robust and stable, thanks to a high level of diversification and stringent investment and management policies.
