Mapfre finished the first nine months of 2023 with a net profit of 470.6 million euros, a 3.6% decline from the same period a year earlier. The company cited an extraordinary impact tied to weaker operating conditions in the United States as a contributing factor, according to an announcement released on Friday.
Specifically, Mapfre identified a negative effect of 75 million euros from the impairment of goodwill on its U.S. insurance operations. This figure reflects the current environment, characterized by higher interest rates and challenges in the Automotive sector amid inflation pressures. The company noted that the final annual figure may vary depending on the types of business and strategic plans. If the 75 million euro impact is excluded, the net result would stand at 545.6 million euros, which represents an 11.7% increase over the first nine months of 2023. There was also an extraordinary positive impact of €46.5 million from an arbitration settlement following the dissolution of the alliance with Bankia.
The executive comments emphasize resilience: the group continues to show revenue and premium growth, supported by diversification and adaptability to an evolving environment. Mapfre highlights ongoing improvements in technical management and the ability to navigate inflationary pressures while pursuing income growth.
By region, Latin America contributed most to profits, aided largely by Brazil, which lifted its net result by 95.1%. This region delivered a total profit of 283.5 million euros, compared with Iberia at 245.5 million euros, down 17.9% year over year. Losses widened in the rest of Europe, the Middle East, and Africa by 80.1% to 30.1 million euros, while the United States showed a loss of 18.8 million euros after counting a profit of 11.2 million in the prior year’s first nine months.
Mapfre Re doubled its profits to 189.5 million euros, even after recording a 100 million euro hit from the Turkey earthquake in the first quarter. Mawdy, on the other hand, reduced profits by 68.2% to 2.4 million.
Total revenues rose compared with the 10.8% growth seen from January to September 2022, reaching 24,595.8 million euros. Premiums advanced by 10.9% to 20,679.4 million euros.
Segment performance showed General Insurance premiums up 12.5% to 6,686 million euros, while the Automobile line grew 3.9% to 4,625 million euros. Life Risk increased 9% to 1,995 million, Life Savings climbed 40.1% to 1,951 million, and Health and Accident rose 10.2% to 1,698 million.
Regionally, Iberia posted the strongest premium growth at 17%, reaching 6,744 million euros. Latin America followed with 7,615.1 million euros, up 11.2%, and North America reached 2,064.1 million euros, up 4.1%. In contrast, the Europe, Middle East, and Africa (EMEA) zone fell 1.9% to 1,008.2 million. The reinsurance segment saw a 9.3% rise to 6,073.2 million euros, while Mawdy stood at 166.1 million euros, up 2%.
Combined rate and dividend
The group’s total Non-Life ratio decreased by 1.7 percentage points year over year, settling at 96.8% amid a notable improvement in the accident rate. The Combined Life Risk ratio rose by half a point to 82.8%. Relative to June 2023, the overall Non-Life rate increased by 0.3 points and the Life Risk rate by 0.1 point.
Automobiles remained the weakest segment with an overall rate of 105.9%, up 0.3 points from September 2022 but down 0.3 points from three months earlier. The General Insurance branch declined 2.8 points versus the prior year to 87.1%, while Health and Accident increased by 1.8 points to 98%.
On the earnings side, Mapfre’s return on equity (ROE) stayed at 8.2% as of September, unchanged from the end of 2022. Excluding the U.S. impact, the ROE would be 9.1%. The investment portfolio grew 2.3% since year-end to 42,323.3 million euros, highlighting a 7.9% rise in government fixed income and a 9.6% rise in corporate fixed income, offset by declines in real estate by 9% and stock investments by 18.8%.
The board announced a provisional dividend for 2023 of 0.06 euros gross per share. Shares will trade ex-dividend from 28 November, with the registration date on 29 November and payment scheduled for 30 November.