Spanish insurer MAPFRE has outlined a new strategic plan for 2022-2024, which includes a premium growth target of 5-6%, as well as an average ROE of 9-10%.
The company recently reported a 45.3% increase in earnings for 2021, which totalled €765 million, backed by double-digit top-line growth and a significant recovery in earnings at its reinsurance unit, MAPFRE RE.
Building on this performance, MAPFRE says its new three-year strategy will emphasise disciplined, sustainable, balanced and profitable growth; improvements in internal efficiency and an acceleration of the transformation already underway.
Among other goals, it will seek to maintain a solvency ratio at a level of 200%, with a margin of tolerance of approximately 25 percentage points, as well as a pay-out ratio of more than 50% and a debt ratio of 23-25%.
Additionally, it will look to position its average combined ratio at 94-95%, while also finishing the three-year period with at least 90% of its investment portfolio rated in line with ESG criteria.
MAPFRE’s sustainability plan confirms reports from last week that suggested the company would set more demanding targets than previously, including a commitment to refrain from investing in coal, gas and oil companies that are not committed to an energy transition plan that limits global warming to around 1.5⁰C.
The company will also extend by 2024 the carbon neutrality already achieved in Spain and Portugal to the main MAPFRE countries around the world, achieving global neutrality by 2030, and grant sustainability approval to all preferred providers in homeowners, automobile, health and procurement in MAPFRE’s main markets.
However, MAPFRE did stipulate that neither its combined ratio or ROE targets will factor in very relevant extraordinary aspects or major catastrophic events, and all objectives were defined prior to the outbreak of war in Ukraine, which could also have a significant impact.
“As the current context has marked a return to tremendous uncertainty, the references used for global inflation, interest rates, currency exchange rates, and economic and insurance growth are subject to high levels of volatility, which could make it necessary to review them in the future depending on the impact and evolution of this conflict,” MAPFRE said.