Release Date: July 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mapfre SA (MPFRF, Financial) reported a strong net result of EUR462 million, up 47% from the previous year.
- The company achieved a significant reduction in the Non-Life combined ratio by 1.3 points to 95.7%.
- Life and General P&C segments showed excellent performance, contributing positively to profitability.
- Mapfre SA (MPFRF) maintained a robust ROE of 10.6%, nearly 12% excluding the 2023 goodwill write-down.
- The company reported a solid growth in premiums, up 5.5%, with notable increases in LATAM, IBERIA, and North America.
Negative Points
- The Auto business in IBERIA is still facing challenges with a combined ratio of 106%, indicating pressure on claim costs.
- The company experienced a EUR36 million impact from hyperinflation, mainly from Argentina.
- There was a EUR41 million net impact from the flood in Rio Grande do Sul, affecting the overall results.
- The EMEA region reported losses, although improved by EUR6 million, indicating ongoing challenges.
- Currency depreciation, particularly the Brazilian real, impacted the company's financials, with a EUR60 million total impact.
Q & A Highlights
Q: What is driving the strong performance in IBERIA Life profitability, especially in Life Savings, and is it sustainable?
A: Jose Luis Jimenez Guajardo-Fajardo, Deputy CFO, explained that Life is performing well, and they expect Life Savings to continue doing well in the second half of the year due to limited competition in saving products. They are also planning to launch new products soon. Additionally, a one-off financial income of EUR21 million from a real estate sale in Madrid contributed to the performance.
Q: What are the reasons for the uptick in the P&C combined ratio in IBERIA, and what is the outlook for 2025?
A: Felipe Navarro Lopez De Chicheri, Corporate Director, stated that the uptick is mainly due to commercial lines' excellent performance in the first quarter. He emphasized the need to look at half-year results due to potential volatility. The general trend remains positive, and they expect continued good performance in IBERIA.
Q: Can you explain the sharp slowdown in premiums in Brazil's agro business in the second quarter?
A: Jose Luis Jimenez Guajardo-Fajardo, Deputy CFO, clarified that the slowdown was due to the calendar of subsidy allocation for the agro business. They expect premiums to catch up during the year.
Q: What is the outlook for the auto business in Brazil, and can it fall below a 100% combined ratio this year?
A: Jose Luis Jimenez Guajardo-Fajardo, Deputy CFO, mentioned that the combined ratio is very close to 100%. They are focusing on being more selective with customers and reducing exposure to fleets, which should improve the ratio in the coming quarters.
Q: How is the business in EMEA performing, and should we expect positive results moving forward?
A: Jose Luis Jimenez Guajardo-Fajardo, Deputy CFO, noted that Turkey is performing well, with a profit of EUR50 million, despite a one-off from selling a life unit. Malta and Italy are performing as expected, while Germany faces challenges in reducing the auto combined ratio.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
