AMSTERDAM–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a+” of MAPFRE España, Compañía de Seguros y Reaseguros S.A. (MAPFRE España) (Spain). MAPFRE España is a subsidiary of MAPFRE S.A. (MAPFRE), the non-operating holding company of the MAPFRE group. The outlook of these Credit Ratings (ratings) remains stable.
The ratings reflect MAPFRE España’s balance sheet strength, which AM Best categorises as strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM). The ratings also reflect the lift MAPFRE España receives due to being part of the MAPFRE group. MAPFRE España is strategically important to the MAPFRE group, as key contributor of premium revenue and earnings for the group. MAPFRE España is the group’s engine for writing non-life business in the Iberian Peninsula and is well-integrated within the MAPFRE group.
MAPFRE España’s strong level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), liquid investment portfolio, prudent reserving and good internal capital generation collectively contribute to an overall balance sheet assessment of strong by AM Best. Furthermore, MAPFRE España’s capital position is protected against the occurrence of most local catastrophe perils, as the majority of these events are covered by Spain’s government’s national scheme (Consorcio de Compensación de Seguros).
MAPFRE España has a track record of generating strong and stable operating results, indicated by a five-year (2014-2018) weighted average return on equity of 11.4% (as calculated by AM Best). MAPFRE España’s 2018 operating results were impacted by adverse weather-related events; however, the company reported a strong technical result as evidenced by a combined ratio of 93.9% (as calculated by AM Best). Although the insurance portfolio has some concentration by geography and by product (particularly Motor and Homeowners in Spain), this is mitigated by the company’s underwriting expertise in its domestic market and by line of business, as demonstrated by a five-year average combined ratio of 94.24% (as calculated by AM Best).
MAPFRE España has a strong position in Spain as a leading non-life insurer, specialising in motor, third-party liability, homeowners’ and commercial insurance. The company’s business profile is supported by its diverse distribution capabilities, including an extensive tied agent network across the Iberian Peninsula, which helps maintain MAPFRE Espana’s position in a highly competitive market. MAPFRE España’s profile is expected to grow further following the completion of an internal restructuring of MAPFRE’s global risks business unit earlier this year, which saw the transfer of MAPFRE GLOBAL RISKS, Compañía Internacional de Seguros y Reaseguros S.A.’s insurance business to MAPFRE España.
MAPFRE España’s ERM is considered to be developed and appropriate for the company’s risk profile and operational scope.
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