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Equity Story April 2020
1
Company Profile
2
mission
vision
values
To be a multinational team that strives tirelessly to improve our services and ensure the best possible
relationships with our clients, distributors, providers, shareholders and society in general
Solvency Integrity
Vocation for service Innovation for leadership
Committed team
To be the most trusted global insurance company
3
Global player
+26 M insurance clients
13,024 branches*
+79,000 distributors
+34,000 employees
+177,000 providers
*Of which: 5,110 own branches, and 7,914 in bancassurance
Diversified business
Breakdown of premiums by line
Information to December 2019
Breakdown of premiums by business unit
4 Information to December 2019
MotorP&C
LifeReinsurance
Health & Accidents
26% 28% 19% 22% 5%
IBERIA 30.0%
LATAM 29.3%INTERNATIONAL
15.7%
MAPFRE RE21.7%
ASISTENCIA3.3%
6.6%
NORTH AMERICA
EURASIA
9.1%7.6%
BRAZIL
LATAM NORTH
LATAM SOUTH
15.5%
6.2%
4.1%
Reinsurance
Global Risks
17.6%
6.6%
NORTH AMERICA
EURASIA
9.1%7.6%
BRAZIL
LATAM NORTH
LATAM SOUTH
15.5%
6.2%
4.1%
Reinsurance
Global Risks
17.6%
5
MAPFRE – ESG
SOCIAL ENVIRONMENTAL GOVERNANCE
2030 SDG Agenda
MAPFRE Priorities
We strive to ensure a solvent and profitable business, while remaining forever committed to our environment and the local community. Fundación MAPFRE not only provides shareholding stability, it also delivers on our mission of driving development in the communities within our footprint.
Closer, more transparent relationships Improving corporate information and
internal and external communication Simplifying product information and
conditions Ethics Channel Corporate tax: 324M€ in taxes; 25% tax
rate
All MAPFRE companies with headquarters in Spain and Portugal will be carbon neutral by 2021 and the Group will be carbon neutral worldwide in 2030 (61% reduction of current Group emissions)
We do not invest in companies deriving 30% or more of their revenues from coal-fired energy sources
We do not insure the construction of new electricity generation plants that are coal-fired, nor will we insure new mines
Permanent contracts: : 97% of >30,000 employees globally
48.3% of vacancies in positions of responsibility covered by women in 2019 (45% in 2021)
2.9% of workforce comprising people with disabilities in 2019 (3% in 2021)
Work-Life balance and professional development measures
Volunteering: 10,400 volunteers, 125,000 beneficiaries
WE ARE COMMITTMENT
6
MAPFRE’s commitment to sustainability
Global commitments: • United Nations (UN) Global Compact • UN Environment Programme Finance Initiative (UNEPFI) • Principles for Sustainable Insurance (PSI) • Paris Pledge for Action • UN Principles for Responsible Investment (PRI) • UN 2030 agenda - Sustainable Development Goals & Human Rights
Sustainable investing & financing • ≈90% of investment portfolio with high & very high ESG ratings • Recent launch of MAPFRE Inclusión Responsable (listed as best practice in the United Nations Global Compact) • Syndicated credit line (€1 bn) converted into sustainable loan
Only participating
Spanish insurer
Rating
The following chart details the current credit ratings for companies registered outside of Spain:
These are the ratings assigned by Standard & Poor's (S&P) Global Ratings, Moody's, A.M. Best and Fitch Ratings to the holding company of MAPFRE Group
and the debt it has issued, as well as to its main subsidiaries:
7
S&P Fitch Moody's A.M. Best
MAPFRE S.A. - Issuer A- (Stable) A- (Stable) - -
MAPFRE S.A. - Senior debt A- BBB+ - -
MAPFRE S.A. - Subordinated debt BBB BBB- - -
Financial strength
- MAPFRE RE A+ (Stable) A+ (Stable) - A (Stable)
- MAPFRE ESPAÑA - A+ (Stable) - A (Stable)
- MAPFRE VIDA - A+ (Stable) - -
- MAPFRE ASISTENCIA - A+ (Stable) A2 (Stable) -
Company Country Rating type Rating Outlook
Fitch
MAPFRE SIGORTA A.S. Turkey Financial strength AA+ (tur) Stable
MAPFRE SEGUROS GENERALES DE COLOMBIA Colombia Financial strength AA (col) Stable
A.M. Best
MAPFRE U.S.A. Group USA Financial strength A Stable
MAPFRE PRAICO Puerto Rico Financial strength A Stable
MAPFRE MÉXICO Mexico Financial strength A Stable
2
Results 12M 2019
8
Figures at a glance
28.5 BN Consolidated
revenue
+7.1%
609 M 7.2% ROE
+0.8 p.p.
8.0%
9
Results 12M 2019
Excluding 2019 goodwill
writedowns
SOLVENCY RATIO
186.8% At 12.31.2019
Robust and resilient
solvency position
675 M Excluding 2019
goodwill writedowns
97.6% Combined
ratio
+0.0 p.p.
96.5% In insurance units
(-1.3 p.p.)
23.0 BN Premiums
+2.2%
Attributable result
+15.2%
Variation vs. December 2018 Figures in €
Total premiums & consolidated revenue
10
Results 12M 2019 Earnings breakdown
*Includes other activities, Holding expenses, and hyperinflation adjustments Figures in million €
17,559
5,4853,287 2,141
Non-Life Life Financial Other revenue
2.9%
0.2%
27.7% 44.9%
Total premiums
23,0442.2%
Consolidated revenue
28,4727.1%
920
614
-255 -324 -346
609
Non-Life Life Other concepts* Taxes Non-controllinginterests
Net earnings
25%
-10%
185% -28% -1%
15%
Distribution by business area
11
Results 12M 2019
Premiums Profit
7,718
3,978
1,9731,597
2,332
1,696
5,580
861
IBE
RIA
BR
AZI
L
LATA
M N
OR
TH
LATA
M S
OU
TH
NO
RT
H A
MER
ICA
EUR
ASI
A
REI
NSU
RA
NC
E &
GLO
BA
L R
ISK
S
ASI
STEN
CIA
0.8%
0.1%
50.7%-0.6%
-3.9%
-4.0%
12.5%
-5.5%
LATAM7,5479.6%
INTERNATIONAL4,027-3.9%
498
9763 55
79
15
58
-88
IBE
RIA
BR
AZI
L
LATA
M N
OR
TH
LATA
M S
OU
TH
NO
RT
H A
MER
ICA
EUR
ASI
A
REI
NSU
RA
NC
E &
GLO
BA
L R
ISK
S
ASI
STEN
CIA
3.6%
79.1%44.6% -7.3%
124.8%
21.0%
-65.9%
--
LATAM215
36.9%
INTERNATIONAL94
97.6%
Figures in million €
12
Results 12M 2019
Source: MAPFRE Integrated Report 2019 & Financial Report December 2019 and ICEA ranking to December 2019 Figures in million €
Attributable result
Combined ratio
Premiums
2,425 2,3142,037
692
Life Motor General P&C Health &Accident
-6.1%
8.5%
1.3%
4.2%
179155
91
40
Life Motor General P&C Health & Accident
21.6%
-25.5%
-0.6%
62.7%
90.8%
98.0%
94.1%93.7%
96.3%
94.4%
Motor General P&C Health & Accident
12M 2018 12M 2019
€7.7 bn Iberia
+0.8% in premiums
€498 mn +3.6% in results
94.4% +0.6 p.p. in combined ratio
12.6% +0.2 p.p. in ROE
IBERIA encompasses MAPFRE’s business activity in Spain and Portugal
Spain is MAPFRE’s main market in terms of contribution to the business (30% of total premiums)
#2 in Direct Insurance, #1 in Auto with a 20% market share
Key strategic initiatives: strengthen the MAPFRE NETWORK and bancassurance channel, large cities, digital health (Savia), better client experience, families, companies
Positive premium and profit development, in a very competitive market
3,978
1,9731,597
BRAZIL LATAM SOUTH LATAM NORTH
0.1%
50.7%
-0.6%
13
Results 12M 2019
Attributable result
Combined ratio
Premiums
Source: MAPFRE Economic Research and Integrated Report 2019 & Financial Report December 2019 Figures in million €
97
6355
BRAZIL LATAMSOUTH
LATAMNORTH
79.1%
44.6%
-7.3%
98.5%98.1%
97.3%
92.2%
94.7%
100.0%
BRAZIL LATAM SOUTH LATAM NORTH
12M 2018 12M 2019
*Ex-PEMEX 16,3%
€7.5 bn +9.6% in premiums
€215 mn +36.9% in results
94.4% -3.8 p.p. in combined ratio
LATAM comprises the regional areas of Brazil, LATAM North and LATAM South
Leading multinational insurance group in the region:
#1 in Non-Life business
#3 overall in the market
It represents 29% of total Group premiums
Profitable growth, with excellent performance in Mexico and successful
implementation of strategy in Brazil
Latam
14
Results 12M 2019
Source: MAPFRE Integrated Report 2019 & Financial Report December 2019 Figures in million €
Attributable result
Combined ratio
Premiums
843
1,630
1,400
Motor General P&C Life-Protection
-16.9%
1.9%
11.8%
-19
67
49
Motor General P&C Life-Protection
66.4%
46.4%
-15.2%
98.5%
114.7%
80.8%
92.2%
107.5%
77.9%
Non-Life Motor General P&C
12M 2018 12M 2019
Second largest market for MAPFRE based on contribution to business
It represents 15% of total Group premiums
#2 in the Non-Life group ranking in Brazil, with a 12.8% market share at November 2019
Strategic alliance with Banco do Brasil since 2010
Focus on technical excellence and profitable growth
Brazil €3.98 bn +0.1% in premiums
€97 mn +79.1% in results
92.2% -6.3 p.p. in combined ratio
9.6% +4.3 p.p. in ROE
15
Results 12M 2019
Attributable result
Combined ratio
Premiums
2,332
1,696
NORTH AMERICA EURASIA
-3.9%
-4.0%
79
15
NORTH AMERICA EURASIA
124.8%
21.0%
102.1%
106.7%
100.4%
106.1%
NORTH AMERICA EURASIA
12M 2018 12M 2019
Source: MAPFRE Economic Research and Integrated Report 2019 & Financial Report December 2019 Figures in million €
INTERNATIONAL comprises the regional areas of North America and Eurasia
It represents 16% of total Group premiums
North America:
Encompasses operations in the United States and Puerto Rico
Produces 9% of total Group premiums
Leading provider of auto, homeowners and commercial lines in Massachusetts
Eurasia:
Includes Italy, Germany, Turkey, Malta, Indonesia and the Philippines
Contributes 7% of total Group premiums
#6 in Non-Life; #10 overall
Improved result in USA, Germany and Italy on the right path to reach objectives
International €4.0 bn -3.9% in premiums
€94 mn +97.6% in results
102.3% -1.2 p.p. in combined ratio
16
Results 12M 2019
Attributable result
Combined ratio
Premiums
Source: MAPFRE Integrated Report 2019 & Financial Report December 2019 Figures in million €
1,686
129 133
Northeast East Central West
3.8%
-26.2% -24.4%
77
-7
1
0-14
Northeast East Central West Exit states Verti
100.5%
117.7%
110.6%
99.4%
114.3%
106.0%
Northeast East Central West
12M 2018 12M 2019
Operational reorganization with important improvements in technical ratios
United States €1.95 bn -4.3% in premiums
€57 mn Stable results
101,8% -2.3 p.p. in combined ratio
Main market: Northeast (Massachusetts)
Exit states:
5 in 2018
3 expected in 2020
Exiting corporate lines except in Massachusetts in 2019
41.4%
18.8%
19.0%
13.7%
4.8%2.4%
P&C Auto Global Risks business
Life & Accident Other lines Transport
77
-19
Reinsurance business Global Risks business
-198.5%
-48.5%
Premiums by region
Premiums by line
Results 12M 2019 Attributable result
17 Source: MAPFRE Integrated Report 2019 & Financial Report December 2019 Figures in million €
1.3%
51.1%28.0%
19.6%
Iberia Eurasia Latam North America
Combined ratio
96.1%92.1%
99.2%
123.5%
Reinsurance business Global Risks business
12M 2018 12M 2019 It comprises the reinsurance and global risks
businesses
It represents 22% of Group premiums
It operates through a global network of 19 representative offices
#16 reinsurer worldwide by premium volume*
Continues generating attractive results, focused on reducing exposure in the global
risks segment to reduce volatility
MAPFRE RE €5.6 bn +12.5% in premiums
€58 mn -65.9% in results
101.0%
4.5% -6.2 p.p. in ROE
+5.4 p.p. in combined ratio
(*) Source: S&P Global Ratings
Results 12M 2019
18
12M 2019
Attributable result -88.0
Total goodwill writedowns -65.6
InsureandGo (U.K.) -35.6
MAPFRE Abraxas (U.K.) -12.8
Brickell Financial Services Motor Club (U.S.A) -16.6
Norassist (Canada) -0.6
Restructuring costs -10.0
Total extraordinary impacts -75.6
Attributable result - adjusted -12.4
2018 2019 AssistanceTravel
InsuranceSpecial Risks
Total operating result -0.7 -2.7 3.0 -9.5 3.8
UK, France & Belgium -15.7 -17.4 -0.1 -18.9 1.6
Rest of Eurasia 6.4 8.3 -1.8 8.9 1.2LATAM 8.5 3.5 0.9 0.4 2.2
NORTH AMERICA 0.1 3.0 4.0 0.1 -1.2
Total
The Unit is specialized in travel assistance and other Group specialty risks
LATAM operations have good results
InsureandGo subsidiaries in Australia and Ireland are performing well
Assistance and specialty risk business expectations in the United Kingdom and North America are being updated
Asistencia business restructuring, focused on the geographic reorganization and
cancellation of unprofitable business
MAPFRE ASISTENCIA €861 mn -5.5% in premiums
-€88 mn in results
103.3% -0.1 p.p. in combined ratio
Source: MAPFRE Integrated Report 2019 & Financial Report December 2019
Figures in million €
Gross operating result*
Breakdown of extraordinary impacts
*Excluding writedowns and restructuring costs
3
Balance sheet and solvency
19
30.1
9.4
2.4
2.81.82.5
2.52.0
53.5
Government fixed income (56.2%)
Corporate fixed income (17.5%)
Real Estate (4.5%)
Other investments (3.8%)
Cash (4.7%)
Mutual funds (3.4%)
Equity (5.2%)
Unit Linked (4.7%)
20
Balance sheet & investment portfolio
72.5 67.3
31.12.2018 31.12.2019
Investment portfolio
Assets under management
Total assets
Figures in billion €
12.31.2018 12.31.2019 % Δ
Assets under management 58.5 63.6 8.8%
of which:
Investment portfolio 49.3 53.5 8.6%
Pension funds 4.9 5.5 12.4%
Mutual funds & other 4.3 4.6 6.9%
Spain 18.2
Italy 2.9
Rest of Europe 2.2
United States 1.6
Brazil 3.0
Rest of LATAM 1.8
Other 0.5
Capital structure Leverage (%) (1)
Interest coverage (x) (2)
Equity 77%
Senior debt8%
Bank financing6%
Subordinated debt9%
13.1
billion
€
18.417.3
12.31.2018 12.31.2019
22.5% 22.7%
12.31.2018 12.31.2019
(1) Total Debt / (Total Equity + Total Debt) (2) Earnings before tax & financial expenses (EBIT) / financial expenses
Shareholders’ equity (billion €)
Capital structure & credit metrics
31.12.2018 31.12.2019
8.0
8.8
21
Solvency margin
22
High quality capital base
Tier 1: 87%
Tier 2: 13%
200% Solvency II target including transitionals (+/- 25 p.p.)
Solvency II ratio
Fully loaded*
* Excluding impacts of transitional measures for technical provisions and equity
Figures in billion €
4
Strategic Plan
2019-2021
23
Transforming for growth and improved profitability
Strategic Plan 2019-2021
24
25
Strategic Plan 2019-2021 Aspirational objectives
Profitable growth
VALUE CREATION GROWTH OPERATIONAL MANAGEMENT
€28-€30 BN revenue by 2021
Average ROE
8%-9%
Non-Life Combined Ratio
Average
96%-97% Premiums +5% Annual average on a
like-for-like basis
Boost the
LIFE business
Life-Protection Premiums +8%
Annual average on a like-for-like basis
26
+10 million automated transactions
Excellence in technical & operational management
Strategic Plan 2019-2021 Objectives
Open, flexible and global
technology
Advanced analytics
platform
73% of measured business with NPS®
outperforming competitors
Client Orientation
Tecnología abierta, flexible y global
QUALITY MEASURE
DIGITAL BUSINESS
INNOVATION
+41% Revenues in the 3-year period
Solutions to
1 million clients
Culture and talent
75%
Tecnología abierta, flexible y global
CULTURE & TALENT INDEX
GENDER EQUALITY
INCLUSION
by 2021 (starting from 63%)
of openings in leadership positions filled by women
45%
of workforce comprising people with disabilities by 2021
3%
Innovation in MAPFRE
• More than 30 startups have gone through the insur_space acceleration and adoption programs, with which we launched eight business pilots in 2019
• Through strategic Efficiency, Automobile Insurance 3.0 and Advanced Analytics initiatives, automobile inspection projects have been developed using image and voice, artificial intelligence and automation.
More than 244,000 clients have benefitted from solutions originating in the open innovation platform
MAPFRE OPEN INNOVATION
27
The Moi innovation model boosts strategic and disruptive innovation
5
Stock market performance and shareholder remuneration
28
Shareholder composition
29 Information to December 2019
Commitment to shareholders
*The amount of the dividend against 2019 results corresponds to: the interim dividend of 0.06 euros gross; the final dividend of 0.085 euros gross, proposed at the Annual General Meeting
Shareholder distribution Stable dividend
Share performance
December 31, 2018 - December 31, 2019 At December 31, 2019
Market cap 7.3 BN €
January – December 2019
MAPFRE +1.7%
IBEX 35 +11.8%
Stoxx Insurance +24.4%
Bancos españoles -3.4%
30
Spanish Banks: the six Spanish banks with the greatest market cap
The Group’s parent company is MAPFRE S.A., whose shares are listed on the Madrid and Barcelona Stock Exchanges. MAPFRE S.A. is also a component of the IBEX 35, Stoxx Insurance, MSCI Spain, FTSE All World Developed Europe Index, FTSE4Good, FTSE4Good IBEX and Dow Jones Sustainability World indexes.
80
85
90
95
100
105
110
115
120
125
130
31-Dec 31-Jan 28-Feb 31-Mar 30-Apr 31-May 30-Jun 31-Jul 31-Aug 30-Sep 31-Oct 30-Nov 31-Dec
base 1
00
MAPFRE IBEX35 STOXX Insurance 600 (Europe) Spanish Banks
1.7%
11.8%
24.4%
-3.4%
6
Conclusions Our differentiating investment case
31
Why MAPFRE is a
differentiating value
Attractive comparison value
Rigorous technical control of the business
Strict capital management and risk diversification
Multiline and multichannel
Geographic diversity
Management
Independent company
Human team as a key value in the organization
Responsible and committed to ESG
Culture
Shareholder stability
Predictable company
Competitive dividend policy
Value
Multichannel approach
Reinforced internal structure and greater operating efficiency
with capacity to generate high recurring profits
Focus on the client
Professional information systems and teams to achieve
excellence
Technology, digitalization and transformation as allies
Commitment to innovation
Strategy
32
33
Natalia Núñez
Capital Markets and Investor Relations
Director
Leandra Clark
Investor Relations
Leslie Hoffman
Investor Relations
Marta Sanchidrián
Investor Relations
Fernando García de la Santa Investor Relations
Who are we? The Investor Relations team
This document is purely informative. Its content does not constitute, nor can it be interpreted as, an offer or an invitation to sell, exchange or buy, and it is not binding on the issuer in any way. The information about the plans of the Company, its evolution, its results and its dividends represents a simple forecast whose formulation does not represent a guarantee with respect to the future performance of the Company or the achievement of its targets or estimated results. The recipients of this information must be aware that the preparation of these forecasts is based on assumptions and estimates, which are subject to a high degree of uncertainty, and that, due to multiple factors, future results may differ materially from expected results. Among such factors, the following are worth highlighting: the development of the insurance market and the general economic situation of those countries where the Group operates; circumstances which may affect the competitiveness of insurance products and services; changes in the basis of calculation of mortality and morbidity tables which may affect the insurance activities of the Life and Health segments; frequency and severity of claims covered; effectiveness of the Groups reinsurance policies and fluctuations in the cost and availability of covers offered by third party reinsurers; changes in the legal environment; adverse legal actions; changes in monetary policy; variations in interest rates and exchange rates; fluctuations in liquidity and the value and profitability of assets which make up the investment portfolio; restrictions in the access to third party financing.
MAPFRE S.A. does not undertake to update or revise periodically the content of this document.
Certain numerical figures included in the Investor Presentation have been rounded. Therefore, discrepancies in tables between totals and the sums of the amounts listed may occur due to such rounding.
Disclaimer
34
