Slide 1: First quarter 2018 Financial results
First quarter 2018 Financial results Analyst and investor presentation April 27th, 2018
Slide 2: Key Figures 3M 2018
Key Figures > 3M 2018 Δ (constant 3M 2018 Δ exchange rates) Revenue 7,257 -7.6% -1.3% Total written and accepted premiums 6,197 -7.2% -0.4% - Non-Life 4,966 -4.8% 2.2% - Life 1,231 -15.5% -9.6% Non-Life Combined Ratio 96.5% -1.0 p.p Non-Life Loss Ratio 68.3% -2.5 p.p Non-Life Expense Ratio 28.2% 1.5
Slide 3: Highlights – 1Q 2018 (I/II)
Highlights – 1Q 2018 (I/II) › The profit and loss account was hit by negative forex effects from all main currencies › Significant improvement in Non-Life underlying result (+5%): › Combined ratio improved to 96.5% › Neutral run off effects from 3Q 2017 NatCat events › Expense ratio in line with 28%
Slide 4: Highlights – 1Q 2018 (II/II)
Highlights – 1Q 2018 (II/II) Several units are now benefitting from the successful implementation › Solid results in IBERIA and MAPFRE RE › Improvements in LATAM NORTH & SOUTH of MAPFRE’s profitable growth › Reduction in losses at MAPFRE ASISTENCIA and in Italy strategy . . . › Return to profitabili
Slide 5: Key figures by business unit
Key figures by business unit Premiums – Distribution by business unit Attributable result Premiums 3M 2018 Δ mn Δ% 3M 2018 Δ% IBERIA 117.9 (9.7) -7.6% 2,342 -1.9% ASISTENCIA LATAM 38.2 (8.3) -17.8% 1,774 -11.3% GLOBAL RISKS 3.3% 3.9% BRAZIL 14.5 (11.7) -44.7% 1,013 -15.8% LATAM NORTH 9.9 5.3 113.9%
Slide 6: Premiums and financial income impacted by forex movements, and lower interest rates in LATAM
Premiums and financial income impacted by forex movements, and lower interest rates in LATAM Revenue ∆ % constant -7.6% exchange rates › Non-Life premiums: largely driven by currency movements -1.3% › IBERIA: +4.9%, growth in main business lines › BRAZIL: slight decline in local currency due to Gene
Slide 7: Underlying earnings benefitting from widespread underwriting improvements
Underlying earnings benefitting from widespread underwriting improvements Extraordinary impacts Evolution of underlying result – 3M 2018 vs. 3M 2017 Underlying net result – 03.31.17 174.3 3M 2017 3M 2018 Δ (mn) Attributable result 206.2 187.0 (19.2) ∆ Technical result – Non-Life +16.3 Coastal Niño (
Slide 8: Combined ratio improved to 96.5% and resilient financial income
Combined ratio improved to 96.5% and resilient financial income Non-Life: Key figures Result of Non-Life business Combined ratio Premiums 3M 2018 Δ% 3M 2018 Δ 3M 2018 Δ% IBERIA 117.6 22.3% 92.1% -2.5 p.p 1,805 4.9% LATAM 56.3 -12.3% 97.7% -1.0 p.p 1,276 -12.4% BRAZIL 29.1 -28.7% 98.3% -0.2 p.p 689 -
Slide 9: 2017 NatCat event update: extremely effective reinsurance protections
2017 NatCat event update: extremely effective reinsurance protections Net loss development by business unit* - March 2018 vs. Dec. 2017 December ∆ 1Q 2018 2017 MAPFRE RE 53.5 2.2 GLOBAL RISKS 57.5 (2.2) Puerto Rico 42.9 0.3 USA 1.1 0.0 Mexico 1.4 0.1 Dominican Republic 0.4 0.1 Loss development - 1Q
Slide 10: Non-Life: Key highlights (I/II)
Non-Life: Key highlights (I/II) Premiums Premiums › Good performance in retail Motor in Spain (+3.4%), together with › USA: positive trends in Northeast (≈+3.2% in USD), mitigating the fall positive trends in Health & Accidents, Commercial and Agricultural in other states (≈-16.1% in USD) insurance
Slide 11: Non-Life: Key highlights (II/II)
Non-Life: Key highlights (II/II) Premiums › Decline in premiums in local currency driven by General P&C (-3%), and › Turkey: local currency decline as a result of stricter underwriting flat premiums in Motor together with strong impact of Turkish lira depreciation › Lower loss ratio thanks to benign
Slide 12: Life: Key figures
Life: Key figures › Fall in Life-savings premiums due to lower sales of unit linked products in Spain, and unfavorable market conditions for sales IBERIA Result of Life business Premiums campaigns 3M 2018 Δ% 3M 2018 Δ% › Premiums in 1Q 2017 included €17.5 mn from UNIÓN DUERO VIDA IBERIA 40.5 -47.9%
Slide 13: Shareholders' equity impacted by currency movements
Shareholders’ equity impacted by currency movements Change in shareholders’ equity (mn€) Shareholders’ equity - breakdown 12.31.2017 03.31.2018 Shareholders’ equity – 12.31.17 8,611 Capital, retained earnings and reserves 8,764 8,706 Treasury stock and other adjustments (41) (39) Δ Financial Assets
Slide 14: High quality investment portfolio and resilient growth in Asset Management business
High quality investment portfolio and resilient growth in Asset Management business Assets under Management Investment portfolio – Breakdown by asset class € 50.6 bn +1.2% Other investments (9%) 4.7 Cash (4%) 2.1 60.1 60.8 Mutual Funds (3%) 1.6 Equity (5%) 2.5 Spain 2.1 10.3 -0.9% 10.2 Real Estate (
Slide 15: Stable level of realized gains and high accounting yields
Stable level of realized gains and high accounting yields Portfolio yield and duration 1 Realized capital gains & losses (mn€) 2 Market Value Accounting Market Duration (bn€) Yield Yield 3M 2017 3M 2018 Non-Life (IBERIA, 12.31.2017 7.19 2.59% 1.23% 6.35 IBERIA 19.9 20.9 MAPFRE RE, & Non-Life MAPFRE
Slide 16: Strong capital position with a high level of financial flexibility
Strong capital position with a high level of financial flexibility Capital structure Leverage (%) 20.1% 18.1% 18.9% Bank Subordinated financing debt 6% 5% Senior debt 8% Equity 03.31.2017 12.31.2017 03.31.2018 € 12.7 81% billion Interest coverage (x) 23.1 21.4 17.7 › Strong fall in interest expense
Slide 17: Stable solvency position, supported by diversified balance sheet and business mix
Stable solvency position, supported by diversified balance sheet and business mix, as well as prudent management strategy Solvency II Solvency II ratio Market sensitivities ratio Interest rate +100 bp -4.0% 196.3% 209.9% 189.4% 200.2% Interest rate -100 bp 3.5% 203.7% 9,616 8,678 8,875 UFR 3.65% -0.
Slide 18: Change in Solvency II position during 2017 largely driven by currency movements
Change in Solvency II position during 2017 largely driven by currency movements Eligible Own Funds (-741 mn€) › IFRS equity (-930 mn€): largely driven by currency movements 12.31.2016 12.31.2017 ∆ › Other SII adjustments (+189 mn€) Eligible Own Funds (EOF) 9,616 8,875 (741) › Intangible assets: lowe
Slide 19: Eligible Own Funds – IFRS reconciliation – December 2017
Eligible Own Funds – IFRS reconciliation – December 2017 IFRS equity 10,513 Participation not included under SII -488 Adjustment to participations (mainly from entities under equivalence) -1,194 Intangible assets -2,990 Real estate capital gains 736 Adjustment in the rest of investments and assets -
Slide 20: Solvency Capital Requirement – December 2017 vs. December 2016
Solvency Capital Requirement – December 2017 vs. December 2016 Market 2,773 2,624 Counterparty 749 822 Underwriting 3,381 3,284 Diversification benefits -2,168 -2,158 BSCR 4,734 4,572 Further adjustments -301 10 Total SCR 4,433 4,582 2017 2016* * 2016 figures reported in line with the figures releas
Slide 21: Wrap-up
Wrap-up Superior performance of Non-Life business, thanks to robust fundamentals Drag from currency movements, that should continue, but to a lesser extent Turnaround expected in Brazil and USA, after business restructuring is fully executed Premiums expected to improve, with an uptick in Life sales
Slide 22: Terminology
03 Wrap-up Terminology Revenue Top line figure which includes premiums, financial income, and revenue from non-insurance entities and other revenue Combined ratio – Non-Life Expense ratio + Loss ratio Expense ratio – Non-Life (Operating expenses, net of reinsurance – other technical revenue + other
Slide 23: Investor Relations
03 Wrap-up Investor Relations Natalia Núñez Investor Relations and Capital Markets Director natalia.n@mapfre.com Antonio Triguero Leandra Clark Marta Sanchidrián Raquel Alfonso atriguero@mapfre.com clarkle@mapfre.com sanchim@mapfre.com asraque@mapfre.com 23
Slide 24: Contact us
03 Wrap-up Contact us If you are an investor or shareholder and would like to receive more information regarding the MAPFRE share or have questions regarding MAPFRE´s results and strategy, please find contact information below: Shareholders Investors Investor Relations MAPFRE S.A. 900 10 35 33 (Spai
Slide 25: Disclaimer
Disclaimer 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 divide