Antonio Huertas announced this Thursday that the insurance company is launching a comprehensive review of its car insurance pricing. The message was blunt: some customers should expect higher rates as costs rise, while others may see reductions. The plan emphasizes a personalized approach, tailoring price adjustments to each customer’s profile and risk type rather than applying a blanket change. The aim is to keep the business profitable amid soaring costs driven by inflation, while maintaining service quality and protecting both customers and shareholders.
The executive stressed that the idea of universal rate freezes for motor insurance is not accurate. Realistic adjustments are necessary to sustain the business in the near and long term. He pointed to the broader industry context, noting that the United States affiliate has already reported challenges, underscoring that no market is immune to the pressures affecting motor insurance pricing. In Spain, competitive forces have driven premium trends lower in recent years, yet the inflation spiral continues to push up the costs of repairing and replacing vehicles. This combination makes it essential for Mapfre to reassess prices to preserve long-term sustainability and the ability to deliver reliable service to policyholders while safeguarding employment and shareholder value.
The plan has also found support from supervisory bodies in many countries where Mapfre operates, who share concerns about the sustainability of the business. He acknowledged that some segments of the Spanish auto market are resistant to price increases, but expressed confidence that the overall strategy will prevail. He noted that while Mapfre is not always the cheapest option, it commands a substantial market presence, insuring millions of vehicles in the country and holding a share of roughly one-fifth of the market. Reaching a higher price point is challenging, he said, but not insurmountable; the goal is to balance competitiveness with profitability to underwrite future growth.
More cost, less extraordinary
The company reported a 16.1 percent decline in net profit year over year, affected by a number of non-operational factors. Excluding a 167 million euro gain from a 2021 alliance with CaixaBank, and a 104 million euro charge related to an extraordinary efficiency program, recurring profits would have fallen by about seven percent. The inflationary effect on loss costs and the higher claims burden linked to vehicle repairs after the lifting of Covid restrictions contributed to the softer results. In addition, large-scale events such as the Parana River basin floods affecting agricultural insurance in Brazil and Paraguay, and hurricane-related losses in Puerto Rico, weighed on the bottom line.
Despite the softer profits, the company declared a dividend of 0.85 euros per share, added to 0.60 euros already paid, totaling 447 million euros in distributions this year. Over recent years, the dividend policy has shown a willingness to maintain robust payout levels in line with the company’s solvency and financial strength. The leadership stressed that there would be no negative surprises and that dividends could rise in subsequent years if results allow. The stock response reflected a cautious optimism about ongoing profitability and balance sheet resilience.
More benefits
Looking ahead to 2023, the financial chief indicated that profits could rise if the accident rate remains normal and no extraordinary disasters occur. The company expects a potential uptick in motor insurance prices alongside higher interest rates. On the investment side, the executive encouraged clients to consider core offerings beyond simple treasury bonds. While bonds remain a stable option, Mapfre emphasizes products that combine life, disability, and death coverage with protection programs. This broader mix aims to offer greater value and protection for policyholders in a changing market.
The leadership also weighed in on the broader policy debate that has shaped the economic landscape. The company argued for defending the enterprise as a major driver of employment and economic activity, noting that it sustains a large share of jobs. While acknowledging political tensions, the executive urged policymakers to focus on real, tangible issues affecting businesses and households rather than timing decisions around minimum wage increases without input from major employers. The tone emphasized pragmatism and responsible governance in navigating the current environment.