MAPFRE RE’s Board of Directors has agreed to a capital increase of €250 million. This operation aims to reinforce MAPFRE RE’s balance sheet strength in order to be able to offer greater reinsurance capacity to its clients in the market and provide it with greater flexibility to structure its own protection covers, thus optimising its underwriting risk at a time when there is a huge demand for cover at rising prices.
The contribution of the funds will be made with MAPFRE’s internal resources from surpluses arising from recent exits from bancassurance agreements. With this move MAPFRE improves the Group’s capital allocation, allowing the units with the greatest potential to grow, as is currently the case in the reinsurance market, which will translate into improved profitability.
“We will have more capacity to provide coverage to our clients at a time when the presence of solvent operators with a long-term service vocation is required, which will allow us to grow at a time of improved technical conditions in this market, while maintaining our traditional prudent management of the business,” explained Eduardo Pérez de Lema, CEO of MAPFRE RE.
MAPFRE’s reinsurance unit is currently the second largest contributor to the Group’s profit, behind MAPFRE Spain. In the last 15 years MAPFRE RE has contributed to the MAPFRE Group a cumulative profit after tax of more than EUR 1.7 billion.
Over the same period, it has recorded an average ROE of close to 11% and an average net Combined Ratio of 96%, despite including years of high catastrophe claims for the reinsurance sector.
Upon completion of the subscription period for the new shares, MAPFRE estimates that its shareholding in MAPFRE RE will increase to 94.43%.
MAPFRE RE is a global reinsurer and the professional reinsurer of the MAPFRE Group. MAPFRE RE offers reinsurance services and capacity providing all types of treaty and facultative reinsurance solutions in all Life and Non-Life lines of business. It obtained premiums of €6,275 million in 2021, with an attributable net result of €152 million.
MAPFRE is a global insurer. A benchmark company in the Spanish market, it is the largest Spanish insurer in the world, the largest insurer in Latin America and the sixth largest in Europe in Non-Life by premium volume. MAPFRE has around 32,500 employees and, in 2021, its revenues were close to 27,300 million euros and net profit stood at 765 million euros.