MAPFRE RE has reported that premiums, which include the reinsurance and large risks business, grew 15.1% in 2022 to €7.22 billion, with attributable earnings of €143 million.
The firm states that these numbers occurred despite the increase in medium-intensity catastrophic events and serious droughts in the Paraná river basin in Brazil and Paraguay, the effect of which on attributable earnings totalled more than €67 million.
The combined ratio of MAPFRE RE improved by 0.3 ratio points, standing at 96.8% at the end of 2022.
The reinsurance business finished the year with premiums of €5.67 billion (+13.6%), which MAPFRE RE attributes to the widespread rise in rates and the impact of exchange rates.
Earnings for the reinsurance business amounted to €123 million, up 4.1% from the previous year, while premiums in the Global Risks business increased by 20.9% to €1.55 billion, with earnings of €21 million (-38.5%).
Meanwhile, the reinsurers parent, MAPFRE, reported that overall attributable earnings in 2022 amounted to €642 million, 16.1% less than the previous year.
On a comparable basis with 2021, when adjusted earnings reached €703 million, they would have been 7% lower, suggests the firm.
MAPFRE adds that its highly diversified business helped to ensure a sustainable result, offsetting the most negative effects of the year, such as high inflation levels in most markets, the increase in claims levels in the Automobile business, and catastrophic claims.
Profitability, with a ROE of 8.2%, was similar to that achieved on a like-for-like basis in 2021.
Group revenue increased by 8.3% in 2022, to €29.51 billion, while premiums grew by 10.8%, exceeding €24.54 billion.
MAPFRE states the increase in premiums reflects a general improvement in the insurance business across nearly all regions, with significant increases in Latin America and North America, as well as in the reinsurance and large risks businesses, with almost all currencies performing favourably against the euro.
Further, the firm observes that premium performance was influenced by the absence in 2022 of the extraordinary two-year policy in Mexico (€477 million in 2021) and the sale of Bankia Vida (which in 2021 contributed €159 million), as well as by the appreciation of currencies against the euro during the year.
Excluding these effects, the increase would have been 8.7%, says MAPFRE, with growth in both Non-Life (+10.8% and Life (+2.1 %).
MAPFRE’s combined ratio rose 0.6 percentage points to 98%, affected by the rise in auto claims, a consequence of high inflation rates, and the increase in mobility after COVID-19 restrictions were lifted.
the firm’s attributable equity at the end of 2021 reached €7.29 billion, while total assets amounted to €59.63 billion.
MAPFRE’s investments amount to €41.39 billion, of which half correspond to sovereign fixed income.
In related news, at the end of last year, MAPFRE RE announced that its Board of Directors had agreed to raise the company’s capital by the amount of €250 million as it sought to offer greater reinsurance capacity to its clients and capitalise on favourable pricing conditions.
MAPFRE explained that the injection forms part of its larger capital allocation strategy, which looks to facilitate growth for those units with the “greatest potential” and to improve profitability.
At the time of the announcement, MAPFRE’s reinsurance unit was the second largest contributor to group earnings, behind its Spain operation.
Over the last 15 years, MAPFRE RE has contributed accumulated earnings after taxes of more than €1.7 billion to its parent group.
