In 2018, Mapfre generated an operating result of €702 million, 0.3 per cent over the previous year. At the end of last year, the company strengthened its balance sheet by allocating €173 million to a partial impairment of goodwill for operations in the US, Italy and Indonesia. After allowing for this allocation, net earnings for the year were €529 million, 24.5 per cent lower than that recorded in 2017.
The fall in financial income is mainly due to low interest rates, depreciation of currencies, and the cost of catastrophic events, which had an impact of €97 million on the reinsurance business.
The total group revenues were €26.6 billion, a fall of five per cent due to currency depreciation in the main countries in which Mapfre operates, namely the US, Brazil, Mexico and Turkey. Premiums stood at just over €22.54 billion (- four per cent), also influenced by the effect of currency depreciation. The impact of currency depreciation accounted for €1.44 billion.
Premiums for the EURASIA Regional Area (which groups together operations in Europe –except Spain and Portugal, the Middle East, Africa and Asia) ended the year at €1.77 billion (-5.6 per cent ). Malta contributed €390 million, representing the highest growth in this region, with an increase of 11 per cent. In Malta, Mapfre is represented by Mapfre Middlesea and Mapfre MSV Life. Turkey produced €486 million (-25.7 per cent), heavily influenced by the depreciation of the Turkish lira. Italy increased business by 0.6 per cent to €474 million while in Germany, growth was 5.3 per cent, up to €327 million.
The solvency ratio remains both robust and stable
At the end of 2018, the group’s combined ratio stood at 97.6 per cent, half a percentage point better than 2017. Equity stood at €9.2 billion, while shareholders’ equity amounted to just under €8 billion, with total assets at €67.29 billion.
The group’s investments reached €49.27 billion at the end of 2018, with 56 per cent corresponding to sovereign debt and 18.1 per cent to corporate fixed income. The rest was invested in equities, cash and real estate.
At the end of September 2018, the Solvency II ratio stood at 207.9 per cent, compared with 201.7 per cent in June, with 88 per cent high-quality capital. 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.
The Reinsurance Unit registered premiums of €3.79 billion for 2018, 10.3 per cent less than the previous years, mostly because most of this unit’s business comes from non-European countries, which experience sharp currency depreciations.
Mapfre also continues to make progress in its commitment to diversity and equality policies, with 40.8 per cent of management job positions throughout the group held by women. In addition, 2.5 per cent of the workforce comprises people with a disability, exceeding the objective set.
Mapfre Middlesea p.l.c. (C-5553) is authorised by the Malta Financial Services Authority to carry on both Long Term and General Business under the Insurance Business Act, Cap 403 of the Laws of Malta. Mapfre MSV Life p.l.c. is authorised by the Malta Financial Services Authority to carry on long-term business under the Insurance Business Act, Cap 403 of the Laws of Malta. Both entities are regulated by MFSA.