Mapfre obtained a net profit of 450.4 million euros during the first nine months of fiscal year 2020, which represents a decrease of 2.7%, due to the impact of the Covid-19 crisis, the earthquakes in Puerto Rico, the typhoon in Japan and the goodwill of the assistance business in 2019 .
The company’s revenue reached 19,051 million euros between January and September, which represents a 11.9% less than in the same period of the previous year, while premiums fell in the same proportion (-11.9%), to 15,550 million euros.
At a constant exchange rate and discounting the effect of the biennial policy of Pemex (Mexico) that was issued in 2019, the reduction in the volume of premiums would be 3%, as reported to the National Securities Market Commission (CNMV).
Mapfre explained that the evolution of the most relevant economic figures must be framed in the context of the Covid-19 crisis, which has led to a slowdown in economic activity and the temporary confinement of the population in most of the countries in those who operate.
In this sense, it has made reference to the direct impacts on insurance units, mainly in deaths in Spain, and in Life-Risk in Brazil and the rest of Latin America.
It has also pointed to the claims related to the pandemic in Mapfre RE or to the fall in financial income as a result of the pressure on returns and lower income from dividends and real estate.
This situation has given rise to an adverse macroeconomic environment, with relevant falls in the stock markets, continued falls in interest rates, and significant depreciation of currencies against the euro, mainly the Brazilian real, the Mexican peso and the US dollar.
The combined ratio of the group at the end of September stood at 95.2%, an improvement of 1.1 percentage points. Mapfre added that there is a reduction in the accident rate, especially in automobiles, in countries such as Spain, the United States or Turkey, although it has increased in other lines such as business multi-risk and deaths in Spain.
Mapfre’s own funds amounted to 8,412 million euros, 5% less than in December of last year, although since the end of the first quarter, the date on which the impacts of Covid-19 surfaced for the first time, 552 million have grown.
Likewise, total assets stood at 68,816 million euros, 5% less than at the end of 2019, as a result of the fall in the stock markets, the depreciation of currencies and the reduction in activity.
The Solvency II ratio stood at 184%, with 86% of the highest quality capital (level 1). According to the company, these levels highlight its “strength, resilience and ongoing management capacity.”
Mapfre’s board of directors has agreed to pay a dividend on account of the results of the 2020 financial year of 5 cents gross per share, which will be delivered on December 22.
The insurer has ensured that this decision has been taken taking into account the recommendations of the supervisory bodies. With this payment, the company will have allocated this year 2020 a total of 416 million euros to pay back its shareholders