Currency depreciation hits growth at Mapfre but profits up

Spanish re/insurer Mapfre posted increased profits in the first nine months of the year but its revenues and premiums written were both down – something it blamed mainly on sharp currency depreciations across many of the main countries in which it operates.

The company’s net earnings for the first nine months of the year reached €529 million, up 18.9 percent on the same period of the previous year, which was impacted by the exceptional catastrophic loss experience in the period. Its revenues were €20.3 billion, down 4.7 percent; its premiums reached €17.22 billion, down 4.3 percent.

It blamed this on sharp currency depreciations. On a constant currency basis, revenue and premiums would have grown by 1.2 percent and 2.2 percent, respectively, it said.

The group’s combined ratio improved by 0.7 percentage points to reach 98.1 percent, with strong performances from Spain (especially in the automobile, health and accident business), Latin America and in its global risks business, it said.

Premiums in its reinsurance unit were down 10 percent to €2.97 billion at the close of September 2018, partly in response to a depreciating dollar. However, net earnings climbed 16.5 percent to reach €113 million, despite absorbing a net impact of €39 million in the quarter in the wake of Typhoon Jebi in Japan. Its combined ratio continued to impress, shedding a further 2.1 percentage points to reach 94.5 percent.

Its Global Risks Business Unit reported premiums of €824 million, down 13.2 percent, also impacted by the foreign currency effect. Significantly, this unit posted profits of €13 million, compared with losses of €87 million in September 2017, and has also made improvements to its combined ratio, which now stands at 95.7 percent.

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