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Spain’s Mapfre profit surges on benign weather, higher prices
Spain’s Mapfre profit surges on benign weather, higher prices
Published by Uma Rajagopal
Posted on October 29, 2024
Global Banking and Finance Review
Company
Published by Uma Rajagopal
Posted on October 29, 2024
By Marta Serafinko and Natalia Siniawski
(Reuters) -Spain’s largest insurer Mapfre reported a 39% jump in net profit in the first nine months of the year as higher prices, more benign weather, and less severe natural disasters lifted the profitability of its non-life business.
Mapfre shares were up 4.7% at 0943 GMT after the results on Tuesday, making them the best performers in Spain’s blue-chip IBEX 35 index.
Net profit for January-September rose to 654 million euros ($804 million) on 21.62 billion euros in premiums, Mapfre said.
The group’s non-life combined ratio – the industry’s key profitability measure – improved by 2 percentage points to 94.8% – a favourable shift attributed to premium increases on insurance policies and fewer and less severe natural disasters.
The most important event in this third quarter was storms in Europe but there have been no other relevant catastrophic claims,” Mapfre’s Chief Investment Officer Jose Luis Jimenez said during a call with reporters. However, in view of the volatility of weather and in view of the continuous increase of middle intensity claims, we have bolstered prudently the reserves for this business unit.
A devastating earthquake in Turkey in early 2023 had cost the company more than 100 million euros in the first half of last year.
In January-September this year Mapfre also recorded a 90 million euro accounting loss on the writedown of the value of Verti Germany, its auto insurance unit.
Auto in Germany is undergoing a scenario of relevant losses because of high inflation levels… Our digital operation in this country is not active in other non-life business lines nor in alternative channels which would allow for the mitigation of auto losses,” Chief Financial Officer Fernando Mata said on the call.
The company had already booked a 75 million euro writedown on its car insurance business last year in the United States, where the prices of cars and car parts were rising faster than insurance premiums.
Mapfre also said it would pay a 2024 interim gross dividend of 0.065 euro per share on Nov. 29, up 8% from the dividend a year earlier.
($1 = 0.9250 euros)
(Reporting by Marta Serafinko and Natalia Siniawski; Editing by Tomasz Janowski, David Holmes and Susan Fenton)