Slide 1: MAPFRE Investor Day 2016
MAPFRE INVESTORDAY 2016
Slide 2: 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
Slide 3: Agenda
AGENDA 00 OPENING REMARKS Mr. TEJERA + Mr. MATA 0 1 S PA I N Mr. INCHAUSTI 0 2 L ATA M + B R A Z I L Mr. BAUSELA + Mr. TONETO 3 0 3 I N T E R N AT I O N A L + U S A Mr. TAMAYO + Mr. CASTELO 0 4 MAPFRE RE Mr. PÉREZ DE LEMA 05 INVESTMENTS Mr. JIMÉNEZ 0 6 C A P I TA L M A N A G E M E N T & S T R AT E G
Slide 4: Spain
01 SPAIN Profitable growth 4 José Manuel leveraging the Inchausti momentum of the economic recovery SPAIN
Slide 5: Spain: Leveraging the momentum of the economic recovery
0 1 S PA I N Leveraging the momentum of the economic recovery 1 A O V E RV I E W BUSINESS PROFILE + HISTORICAL PERFORMANCE + MARKET CONTEXT 1 B TO P I C S F O R D I S C U S S I O N 5 Profitable Growth Strategy Digital Business and Digital Transformation The Future of the Bancassurance Model Competin
Slide 6: Business Profile: leading player in the Spanish insurance market
0 1 S PA I N Leveraging the momentum of the economic recovery Business Profile The leading player in the Spanish insurance market MAPFRE is the benchmark insurance MAPFRE ESPAÑA is the holding company in Spain with an overall company for Non-Life operations and market share of 11.3% is the result of
Slide 7: Leading distribution footprint
0 1 S PA I N Leveraging the momentum of the economic recovery Business Profile Leading distribution footprint Regional General Management ‣ Tied and own branches: 2,961 Madrid – Balearic Islands ‣ Exclusive Agents: 9,900 Cataluña 7 ‣ Brokers: 3,775 Southwest ‣ Providers: + 37,000 North ‣ Branches wi
Slide 8: Product mix and number of policyholders
0 1 S PA I N Leveraging the momentum of the economic recovery Business Profile Product mix [2015]* Number of policyholders [2015] 9% 7% 5% 6% 7% 34% 4% 2% 40% 3% 8 13% 22% 30% 18% MOTOR LIFE MOTOR LIFE HOMEOWNER & CONDOMINIUMS THIRD PARTY LIABILITY HOMEOWNER & CONDOMINIUMS THIRD PARTY LIABILITY HEAL
Slide 9: Premium Evolution Life + Non-Life
0 1 S PA I N Leveraging the momentum of the economic recovery Historical Performance Premium Evolution > Life + Non-Life 7.0% 10000 .0 2.7% 6.5% -5.6% -8.7% -1.8% 7500. 0 9 7,192 6,793 6,722 6,369 5000. 0 6,202 6,254 4,762 5,070 2500. 0 - 2010 2011 2012 2013 2014 2015 9M 2015 9M 2016 PREMIUMS ↗% R
Slide 10: Attributable Results + ROE
0 1 S PA I N Leveraging the momentum of the economic recovery Historical Performance Attributable Results + ROE ROE 25.0% 23.2% 9.9% 10.5% 12.3% 12.4% 13.5% 10.9% 1000. 0 32.9% 750. 0 -7.3% 9.3% 10 17.8% 642 -10.3% 500. 0 595 -53.6% 432 472 404 362 250. 0 325 276 - 2010 2011 2012 2013 2014 2015 9M 2
Slide 11: Non-Life Premiums + Combined Ratio
0 1 S PA I N Leveraging the momentum of the economic recovery Historical Performance Non-Life > Premiums + Combined Ratio Combined 90.9% 89.9% 91.2% 94.0% 95.6% 97.6% 97.0% 93.4% Ratio 10000 .0 2.4% 1.3% 0.9% -0.6% -2.1% 11 -5.0% 5000. 0 4,688 4,661 4,430 4,336 4,391 4,429 3,463 3,547 - 2010 2011 20
Slide 12: Non-Life Attributable results + ROE
0 1 S PA I N Leveraging the momentum of the economic recovery Historical Performance Non-Life > Attributable results + ROE ROE 29.2% 28.6% 11.8% 12.7% 14.1% 9.2% 11.7% 11.8% 1000. 0 19.1% 33.7% 20.3% 750. 0 -8.9% 12 -58.0% -28.8% 500. 0 507 462 250. 0 278 237 194 231 198 177 - 2010 2011 2012 2013 20
Slide 13: Life Premiums
0 1 S PA I N Leveraging the momentum of the economic recovery Historical Performance Life > Premiums 40% 3000. 0 2,766 2,589 2500. 0 2,321 21.1% 20% 2,049 2,148 2000. 0 7.2% 00% 1500. 0 1,392 -20% 13 1,130 1000. 0 933 -40% 396 432 489 460 470 433 366 392 500. 0 -60% - -80% 2010 2011 2012 2013 2014 2
Slide 14: Life Attributable results + ROE
0 1 S PA I N Leveraging the momentum of the economic recovery Historical Performance Life > Attributable results + ROE ROE 16.2% 14.1% 7.1% 7.4% 9.7% 16.5% 15.7% 9.8% 1000. 0 100% 89.4% 750. 0 53.7% 50% -1.5% 15.6% 14 0% 500. 0 - 50% -38.7% -44.6% 250. 0 274 - 100% 227 135 133 82 94 145 126 - - 150%
Slide 15: Life Managed Savings
0 1 S PA I N Leveraging the momentum of the economic recovery Historical Performance Life > Managed Savings 400 00.0 15% 10% 4.0% 300 00.0 24,432 05% 3.9% 15 22,006 21,985 22,853 00% 200 00.0 17,817 17,811 18,634 19,504 -05% 100 00.0 -10% -15% 7,125 6,814 6,821 7,351 8,091 7,543 7,255 7,544 - -20% 2
Slide 16: Life Technical and Financial Margin
0 1 S PA I N Leveraging the momentum of the economic recovery Historical Performance Life > Technical and Financial Margin* 100% 2. 00% 50% 16 1. 50% 00% 1. 00% 1.22% 1.23% -50% 1.00% 0.86% 0.81% 0. 50% 0.74% -100% 0.46% 0.49% 0. 00% -150% 2010 2011 2012 2013 2014 2015 9M 2015 9M 2016 Technical - fi
Slide 17: Market Context: highly competitive market
0 1 S PA I N Leveraging the momentum of the economic recovery Market Context Highly competitive market Improved economic indicators GDP CPI Increase in car registrations and 05 04 3.2 3.2 motor pool 03 2.4 2.9 2.3 17 2.1 02 1.4 Price evolution in Non-Life, 1.5 01 0.3 00 related to increase in
Slide 18: Spain: Topics for discussion
0 1 S PA I N Leveraging the momentum of the economic recovery 1 A O V E RV I E W BUSINESS PROFILE + HISTORICAL PERFORMANCE + MARKET CONTEXT 1 B TO P I C S F O R D I S C U S S I O N 18 Profitable Growth Strategy Digital Business and Digital Transformation The Future of the Bancassurance Model Competi
Slide 19: Profitable growth: new Motor production Tu Eliges
0 1 S PA I N Leveraging the momentum of the economic recovery Profitable growth strategy: Reaching our goal of an average CoR <96% for 2016 - 2018 Above market growth, without losing the focus on profitability . . . New Production MOTOR policies “ TU ELIGES” Successful launch of “Tu 19 Eliges”, a
Slide 20: Fostering client loyalty: service centers
0 1 S PA I N Leveraging the momentum of the economic recovery Profitable growth strategy: Reaching our goal of an average CoR <96% for 2016 - 2018 . . . while fostering client loyalty . . . Development of service centers Nº service centers: 20 Nº services (Sept. 2016): 20 25,014 (+46.7%) Avera
Slide 21: Client retention and NPS advantage
0 1 S PA I N Leveraging the momentum of the economic recovery Profitable growth strategy: Reaching our goal of an average CoR <96% for 2016 - 2018 . . . which can be seen in our excellent client retention levels and our NPS advantage vs. peers Motor cancellation rate - 2015 NPS – Advantage vs. Marke
Slide 22: Improved technical management
0 1 S PA I N Leveraging the momentum of the economic recovery Profitable growth strategy: Reaching our goal of an average CoR <96% for 2016 - 2018 Improved Technical Management Motor: Cost reduction for property 6.5% reduction in average 22 claims cost damage Homeowner: Restructuring loss- 9.8
Slide 23: Project 80/20
0 1 S PA I N Leveraging the momentum of the economic recovery Profitable growth strategy: Reaching our goal of an average CoR <96% for 2016 - 2018 Project 80/20*: Strict monitoring and control of 170 million € cancelled 23 less profitable business segments ≈1 p.p. improvement in Combined Ratio
Slide 24: Baremo
0 1 S PA I N Leveraging the momentum of the economic recovery Profitable growth strategy: Reaching our goal of an average CoR <96% for 2016 - 2018 Baremo Impact in line with initial forecasts and tariff increases 24 Conservative approach due to its recent implementation (1st January 2016) and
Slide 25: Digitalization of operations and client relationship
0 1 S PA I N Leveraging the momentum of the economic recovery Digital Business and Digital Transformation Digitalization- Operations (% of Digitalization- Client relationship services digitalized) transaction growth 25 Target 2018: 30% SPAIN TOPICS FOR DISCUSSION
Slide 26: VERTI
0 1 S PA I N Leveraging the momentum of the economic recovery Digital Business and Digital Transformation VERTI Improved technical results, thanks to: Cost reduction 26 Improvements in the underwriting process Increased synergies with MAPFRE Laboratory of ideas for MAPFRE to test and devel
Slide 27: The Future of the Bancassurance Model - Spain
0 1 S PA I N Leveraging the momentum of the economic recovery The Future of the Bancassurance Model - Spain Bancassurance business weight in MAPFRE reach 11.6% Banking entities need to push the 27 insurance business in their networks, to complement the reduced margins in traditional banking prod
Slide 28: Competing in the Current Low-interest rate Environment
0 1 S PA I N Leveraging the momentum of the economic recovery Competing in the Current Low-interest rate Environment New product offering focused on: Products where policy holder bears Unit Linked/ Investment & Mutual investment risk funds 17% Lower capital charges Life Protection with highe
Slide 29: Spain: Conclusions
0 1 S PA I N Leveraging the momentum of the economic recovery SPAIN: Conclusions • Economic recovery feeding through into the Spanish domestic operations; MAPFRE should continue to benefit • Our increasing profitability has been achieved, despite the challenges of regulatory changes (new Baremo) and
Slide 30: LATAM + Brasil
02 LATAM+ Profitable growth 30 BRASIL in a difficult market Aristóbulo Bausela environment Wilson Toneto
Slide 31: LATAM + Brazil: Overview and topics for discussion
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment 2 A L ATA M - O V E RV I E W Market Context + Business Profile + Historical Performance 2 B TO P I C S F O R D I S C U S S I O N 31 BRAZIL – Overview + Market Outlook + MAPFRE BRASIL performance and outlook Countries with
Slide 32: Market context: world insurance market
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment Market context World market (premiums) = $4.5 trillion = €4.0 trillion USA/Canada Europe 31.4% Asia 32.3% 29.6% 32 Africa 1.4% Latin America and Caribbean Oceania 3.5% 1.8% Latin America and Caribbean = $158.15 billion = €
Slide 33: Market distribution by country - premiums
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment Market distribution by country - premiums ECUADOR 1.4% PERU 2.3% $ 158.15 OTHER billion 7.5% VENEZUELA 4.7% 33 COLOMBIA 5.5% BRAZIL 43.7% CHILE 7.2% ARGENTINA 12.3% MEXICO 16.6% 94% of business is concentrated in 8 count
Slide 34: Latin America Insurance Group Ranking 2015
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment LATIN AMERICA Insurance Group Ranking 2015 NON-LIFE OVERALL Market Market Ranking Groups Country share Ranking Groups Country share 2015 2015 1 --- Brazil 7.1 34 1 MAPFRE Spain 8.2 2 --- Brazil 6.8 2 --- Brazil 3.9 3 --- U
Slide 35: MAPFRE in LATAM milestones
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment 1984 COLOMBIA 1986 ARGENTINA, PARAGUAY AND CHILE MAPFRE IN LATAM MILESTONES 1989 MEXICO 1992 BRAZIL 1994 URUGUAY 1997 VENEZUELA AND PERU 35 1999 EL SALVADOR 2005 Leader in LATAM NON-LIFE 2007 DOMINICAN REPUBLIC 2008 ECUADO
Slide 36: Threats and opportunities
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment THREATS Falling oil prices and other commodities Currency devaluations Inflationary environments Drop in foreign investment State intervention 36 OPPORTUNITIES Key region for the present and future of the world
Slide 37: Insurance growth potential in Latin America
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment The potential for insurance growth is particularly clear in Latin America Premiums as a % Growth forecast of GDP 2016-2018 ARGENTINA 3.45% 37.1% - 37.4% (1) CENTRAL AMERICA 1.76% 7.6% - 8.8% 37 CHILE 4.71% 6.3% - 7.9% COLO
Slide 38: LATAM territorial area 2015
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment LATAM TERRITORIAL AREA 2015 LATAM NORTH BRAZIL Brazil 38 LATAM SOUTH LATAM + BRAZIL OVERVIEW
Slide 39: Premiums by Regional Area and attributable result
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment Premiums by Regional Area Attributable result 39 Brazil Brazil 20% 18% LATAM LATAM 36% 29% Latam South 8% Latam South 6% Latam North 8% Latam North 5% Data as of December 31, 2015. LATAM + BRAZIL OVERVIEW
Slide 40: Product mix and distribution channels
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment Highly diversified business, underpinned by a solid distribution strategy Product mix Distribution channels 40 MOTOR 2% AGENTS' NETWORK 13% 21% 27% BROKERS OTHER NON-LIFE 34% 16% CAR DEALERSHIPS LIFE BANKS 2% HEALTH & ACCI
Slide 41: Premium growth and combined ratio
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment Premium growth and positive evolution of combined ratio, which was reduced below 100% in 2012 JV with Banco PREMIUMS ≈14% do Brasil CAGR 103.9% 8,887 9,225 103.0% 102.8% 103.7% 8,649 8,307 101.3% 6,874 6,714 41 5,156 100.8
Slide 42: Attributable result and ROE
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment ATTRIBUTABLE RESULT JV with Banco CAGR ≈11% do Brasil (1) 16.8% 14.4% 12.0% 12.6% 11.6% 12.6% 10.6% 9.8% 10.2% 10.4% 10.1% 9.2% 305 259 263 215 226 231 183 143 42 100 114 113 93 2006 2007 2008 2009 2010 2011 2012 2013 2014
Slide 43: LATAM + Brazil: Topics for discussion
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment 2 A L ATA M - O V E RV I E W Market Context + Business Profile + Historical Performance 2 B TO P I C S F O R D I S C U S S I O N 43 BRAZIL – Overview + Market Outlook + MAPFRE BRASIL performance and outlook Countries with
Slide 44: Brazil's contribution to MAPFRE
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment The contribution from Brazil has played a decisive role in MAPFRE becoming the top multinational insurance group in Latin America today • Business in Brazil represents 20 per cent of the Group’s world premiums and 45 per c
Slide 45: Business profile - Brazil
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment Business profile - Brazil Product mix Distribution channels Banco do MAPFRE Brasil channels 14% LIFE 74% 26% 34% 45 19% €4,669 MOTOR 42% 58% million AGRO 85% 15% 33% OTHER P&C 26% 74% TOTAL 55% 45% Life Motor Other P&C Agr
Slide 46: Brazil: premiums and combined ratio
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment Brazil: growth of premiums in local currency and excellent level of combined ratio JV Banco do PREMIUMS IN LOCAL Brasil ≈11% CURRENCY: CAGR 100.2% 95.4% 96.1% 94.7% 93.6% 93.8% 92.6% 5,036 5,405 46 4,761 4,669 3,561 3,584
Slide 47: Brazil: track record of profitability
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment Brazil: solid track record of profitability JV Banco do Brasil ATTRIBUTABLE RESULT: CAGR ≈14% 15.5% 15.0% 12.6% 13.1% 12.2% 9.2% 170 8.2% 144 145 47 131 112 99 101 2011 2012 2013 2014 2015 9M 2015 9M 2016 ATTRIBUTABLE RESU
Slide 48: Brazil: breakdown of underwriting result, Life
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment Brazil: breakdown of underwriting result Life insurance U/W AND FINANCIAL ≈43% RESULT: CAGR 497 431 301 383 360 48 169 1,972 1,624 1,700 1,638 1,210 1,078 2012 2013 2014 2015 9M 2015 9M 2016 PREMIUMS UNDERWRITING AND FINAN
Slide 49: Brazil: breakdown of technical result, Non-Life
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment Brazil: breakdown of technical result Non-Life insurance U/W RESULT: CAGR ≈11% 187 147 112 106 99 91 49 3,137 3,336 3,432 3,031 2,374 2,120 2012 2013 2014 2015 9M 2015 9M 2016 PREMIUMS UNDERWRITING RESULT Positive evolut
Slide 50: Market context - Brazil
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment Market context - Brazil Weakness of Brazil’s GDP was confirmed in 2015 with a fall of 3.8%. IMF expects a GDP decrease of 3.3% in 2016 and 0.5% growth for 2017 Low levels of insurance penetration and the rising middle
Slide 51: Brazil: insurance market vs GDP
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment Brazil: performance of insurance market in an improving environment Insurance market GDP 12.1% 6.5% 7.0% 7.2% 4.6% 3.4% 51 2.7% -1.5% 2.4% 2.5% 1.8% -3.3% 1.2% 0.1% -3.8% -5.3% 2012 2013 2014 2015 2016* 2017* 2018* 2019*
Slide 52: Brazil: expected evolution of premiums
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment Brazil: expected evolution of premiums Strength of Banco do Brasil channel in credit- Cross-selling potential related business for at least 15 years Development of Health insurance with good Multi-distribution and
Slide 53: Brazil: wrap up and prospects
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment Brazil: wrap up and prospects After 4 years of economic and political crisis, there are positive signs for the next 3 years, together with volatility Insurance market will keep higher levels of growth than GDP and will
Slide 54: Countries with outstanding performance
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment Countries with outstanding performance: PERU, CHILE, PARAGUAY, URUGUAY, DOMINICAN REPUBLIC AND CENTRAL AMERICA Sustainability of current levels of growth in premiums and results Initiatives to achieve premium growth hi
Slide 55: Argentina, Mexico, Colombia and Ecuador
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment ARGENTINA, MEXICO, COLOMBIA AND ECUADOR Impact of regulatory changes: Provisions (Mexico), Life-Savings (Colombia), Health (Ecuador), Workers’ Compensation (Argentina) 55 Portfolio review, 80/20 analysis, leaving certa
Slide 56: Strategic actions 2016-2018
0 2 L ATA M + B R A Z I L Profitable growth in a difficult market environment Strategic actions 2016-2018 Focus on Talent the client Management Technical Management 56 Your Business Reducing Development in Trusted expenses all lines Global Insurer Multi-distributor Digital development Transformation
Slide 57: International + USA
03 INTERNATIONAL Profitable growth 57 + USA with a focus on strong Jaime Tamayo currencies Alfredo Castelo INTERNATIONAL+ USA
Slide 58: International: Overview and topics for discussion
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment 3 A O V E RV I E W BUSINESS PROFILE + HISTORICAL PERFORMANCE 3 B TO P I C S F O R D I S C U S S I O N 58 United States Italy & Germany Turkey
Slide 59: Business Profile: MAPFRE Internacional
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment Business Profile MAPFRE INTERNACIONAL is the company which encompasses all of the Group’s insurance operations outside of Latin America & Iberia: -MAPFRE NORTH America Region: USA, PR & Canada -Asia Pacific Region
Slide 60: Business Profile: market presence and ranking
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment Business Profile Presence 2015 Market Ranking share 60 USA - MASS (AUTO Private) 25.6% #1 - MASS (Homeowner) 13.4% #1 - MASS (AUTO Comm) 13.6% #1 Puerto Rico (non-life) 15.1% #3 Turkey (non-life) 7% #4 Italy (onli
Slide 61: Premiums and main segments by market
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment Business Profile Premiums and main segments by market Philippines 41 Italy 260 Germany 114 USA 2,110 61 €3,855 mn Malta 270 Turkey 698 Puerto Rico 362 PA: personal accidents Gross written and accepted premiums. Da
Slide 62: Historical Performance: Premiums + Combined Ratio
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment Historical Performance Premiums + Combined Ratio 2015: Growth due to acquisition of DL Italy 2016: Growth due to acquisition of & Germany (June 2015) Direct Line Italy & Germany and rate increases in Turkey an
Slide 63: Historical Performance: Attributable results + ROE
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment Historical Performance Attributable results + ROE 2015: Snow storms in the US: €318 gross loss. New reinsurance protection program in place. Lower profit in Turkey 2011: Winter storm in the US: €103 mn due to
Slide 64: International: Topics for discussion
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment 3 A O V E RV I E W BUSINESS PROFILE + HISTORICAL PERFORMANCE 3 B TO P I C S F O R D I S C U S S I O N 64 United States Italy & Germany Turkey
Slide 65: Key Strategic Markets: MAPFRE USA
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment Key Strategic Markets MAPFRE USA 65 Alfredo Castelo INTERNATIONAL + USA TOPICS FOR DISCUSSION
Slide 66: MAPFRE USA - Overview
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment MAPFRE USA – Overview 1. MAPFRE USA is the leading insurance company in 4. The company’s distribution model is based Massachusetts in Non-Life with important market primarily on agreements with independent shares:
Slide 67: MAPFRE USA: leading player in Massachusetts
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment MAPFRE USA: the leading player in Massachusetts Massachusetts is a mature and profitable state which operates in traditional channels (IAs and AAA) MAPFRE USA is the state leader in private passenger auto, commerc
Slide 68: Diversification outside Massachusetts
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment MAPFRE USA: the diversification effort outside Massachusetts is working Premium distribution CAGR 2010 - 2015 100% 90% 27% +7.5% 30% 31% 68 80% 70% 60% 50% 40% 73% 70% 69% 30% +3.2% 20% 10% 0% 2010 2015 9M 2016 Ma
Slide 69: Underwriting actions are bearing fruits
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment MAPFRE USA: Underwriting actions are bearing fruits Severe weather events have had significant impacts on MAPFRE USA: more than €435 mn in 7 years 2015 was particularly affected by the severe winter weather in
Slide 70: Strong expense management control
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment Strong expense management control Efforts to expand the operation outside MA increased expenses from 2012 to 2014 Close to 1 pp lower ratio than industry average US Expense ratio includes Premium tax (ca 2.3
Slide 71: MAPFRE USA: USD 718 mn dividends paid since 2008
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment MAPFRE USA: USD 718 mn dividends paid since 2008 180 160 165 165 140 120 100 105 71 80 90 60 80 65 40 20 30 18 0 0 2008 2009 2010 2011 2012 2013 2014 2015 9M 2016 MAPFRE USA Dividends (USD mn) No dividend paid i
Slide 72: Attributable result
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment Attributable result 2015 Record winter snow storms More than €500 mn in attributable 120.3 results despite much lower net 72 94.3 84.7 91.5 financial income 59.4 2015 net financial income is ca. 54.5 45.8 €32
Slide 73: Return on Equity MAPFRE USA vs US Industry
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment Return on Equity (%) ROE MAPFRE USA vs US Industry* 14 12 12.1 10 11.4 9.8 9.4 8 8.8 8.6 9.6 7.5 8.5 6 7.1 6.7 7.3 7.1 7.4 6.2 7.2 7.6 7.3 5.4 5.4 5.7 4 5.0 4.7 73 2 3.6 3.6 0 -2 -2.8 -3.9 -4 2010 2011 2012 2013 2
Slide 74: MAPFRE USA: Conclusions
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment MAPFRE USA: Conclusions • Increasing profitability especially in growth states outside Massachusetts is a key • Despite a challenging environment, MAPFRE objective 74 USA has a significant and profitable operation
Slide 75: Key Strategic Markets: Direct Line Italy
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment Key Strategic Markets 75 DIRECT LINE ITALY INTERNATIONAL + USA TOPICS FOR DISCUSSION
Slide 76: Italy Overview: Market context
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment ITALY Overview: Market context 2nd largest motor market in the EU with 36 million vehicles and € 16.6 bln Motor market profitable at 93% COR in 2015 concentrated in TPL coverage (2% casco) 78% of Motor marke
Slide 77: Direct Line Italy
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment Direct Line ITALY MAPFREs acquisition of Direct Line accelerated expansion plans in the 2º largest motor market in the EU gaining a 24% market share within the pure direct carriers Direct channel continuous gr
Slide 78: Key Strategic Markets: Direct Line Germany
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment Key Strategic Markets 78 DIRECT LINE GERMANY INTERNATIONAL + USA TOPICS FOR DISCUSSION
Slide 79: Germany Overview: Market context
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment GERMANY Overview: Market context Largest economy within the EU with 82 million people € 25 bln Auto market with 54 million vehicles € 2 bln Auto Direct market:(8% of total auto market): MAPFRE Direct Line wi
Slide 80: Overview: Direct Line Germany
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment Overview: Direct Line Germany 10 years of continuous profitability in the German market Seasoned management team with strong knowledge of the German Auto market Focus on a digital direct customer oriented st
Slide 81: Key Strategic Markets: MAPFRE Turkey
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment Key Strategic Markets 81 MAPFRE TURKEY INTERNATIONAL + USA TOPICS FOR DISCUSSION
Slide 82: Turkey Overview: Market context
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment TURKEY Overview: Market context • Total population 78.7 million. Average age 30, 25.7%<14 years old • Non-life premiums 1.35% of GDP • 20.0 million registered vehicles = 255 / thousand inhabitants. 21.8% uninsured
Slide 83: MAPFRE Turkey
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment MAPFRE TURKEY Excellent 9M 2016 results with a COR of 97.8% and 30.8% GWP increase Development over 10 year period, from ranking #10 to #4 Leader in commercial and industrial segments (#1 Engineering). High
Slide 84: Conclusions
0 3 I N T E R N AT I O N A L + U S A Profitable growth in an international environment CONCLUSIONS Solid and growing presence in strategic 24% market share amongst the pure direct markets for MAPFRE producing a strong companies in the 2nd largest auto market in diversification both from risk and cur
Slide 85: MAPFRE RE
04 MAPFRE RE Weathering the storm 85 Eduardo Pérez de in a highly competitive market Lema
Slide 86: MAPFRE RE: Overview and topics for discussion
04 MAPFRE RE Weathering the storm in a highly competitive market 4 A O V E RV I E W Business Profile + Historical Performance + Market Context 4 B TO P I C S F O R D I S C U S S I O N 86 Profitability in a soft market MAPFRE RE´s competitive advantage MAPFRE RE´s synergies with MAPFRE GROUP Market o
Slide 87: Business Profile: MAPFRE RE
04 MAPFRE RE Weathering the storm in a highly competitive market Business Profile MAPFRE RE is a leading player in the global reinsurance market Professional reinsurer of MAPFRE Group, which set up its Reinsurance unit in 1982 MAPFRE RE offers services and reinsurance capacity, through all kind
Slide 88: Business Profile: global offices
04 MAPFRE RE Weathering the storm in a highly competitive market Business Profile 88 •London, UK •Milan, Italy •Bogota, Colombia •Munich, Germany •Brussels, Belgium •New Jersey, USA •Buenos Aires, Argentina •Paris, France •Caracas, Venezuela •Beijing, China •Labuan, Malaysia •Santiago de Chile, Chil
Slide 89: Premiums by ceding company and region
04 MAPFRE RE Weathering the storm in a highly competitive market Business Profile Premiums by ceding company (%) Premiums by region (%) Gross Net MAPFRE 44% 24% 7 9 18 13 89 Non-Group 56% 76% APAC N. AMERICA 35 47 Non-Group Business: Fully retained EMEA and protected for CAT events (90% LATAM rete
Slide 90: Total portfolio
04 MAPFRE RE Weathering the storm in a highly competitive market Business Profile Total portfolio By type of business By insurance line By source of business Facultative 6% Others 6% Non- proportional Transport 5% Property 12% Broker 27% 90 48% Motor / TPL 15% Proportional Life & Direct 73% 82% Acci
Slide 91: Non-Group portfolio
04 MAPFRE RE Weathering the storm in a highly competitive market Historical Performance Non-Group portfolio By type of business By insurance line By source of business Facultative 5% Others 3% Non- proportional Marine 5% 15% Property 45% 91 Motor / TPL 15% Direct 53% Broker 47% Proportional Life & 8
Slide 92: Premiums and attributable results
04 MAPFRE RE Weathering the storm in a highly competitive market Historical Performance Premiums +8.5% CAGR 3.254 3.343 3.732 3.180 ≈11% 2.885 2.930 2006-15 2.372 2.631 1.779 2.054 1.438 1.601 92 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 9M 9M 2015 2016 Attributable results CAGR +12.3% 2006-
Slide 93: High technical margins, reduced volatility
04 MAPFRE RE Weathering the storm in a highly competitive market Historical Performance MAPFRE RE has obtained high technical margins, with reduced volatility . . . 114,0 107,7 99,7 100,6 95,7 97,0 96,5 96,7 93 93,2 95,5 93,9 95,5 92,3 91,6 93,2 93,5 92,6 93,1 90,0 91,1 89,8 90,1 90,6 86,8 2005 2006
Slide 94: Attractive returns above industry average
04 MAPFRE RE Weathering the storm in a highly competitive market Historical Performance . . . generating attractive returns, above the industry average . . . 15,6 14,6 14,7 14,2 14,2 13,0 12,9 13,0 13,5 12,8 12,4 11,0 11,6 10,6 9,6 9,3 9,5 7,7 94 2,1 1,9 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 95: Shareholders' Equity and Dividends paid
04 MAPFRE RE Weathering the storm in a highly competitive market Historical Performance Evolution of Shareholders’ Equity Dividends paid Average Pay Out: 65% 1.292 86,0 90,3 81,6 1.179 1.174 95 56,6 1.010 40,4 969 848 2011 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 (Sep) (Sep) MAPFRE RE is a
Slide 96: Absence of large catastrophic losses and excess capacity
04 MAPFRE RE Weathering the storm in a highly competitive market The absence of large catastrophic losses and excess capacity in the market puts pressure on rates Overall market results still positive, but “normalized” margins hardly cover cost of capital industry-wide Still highly competitive e
Slide 97: MAPFRE RE: Topics for discussion
04 MAPFRE RE Weathering the storm in a highly competitive market 4 A O V E RV I E W Business Profile + Historical Performance + Market Context 4 B TO P I C S F O R D I S C U S S I O N 97 Profitability in a soft market MAPFRE RE´s competitive advantage MAPFRE RE´s synergies with MAPFRE GROUP Market o
Slide 98: Maintaining profitability in a soft market
04 MAPFRE RE Weathering the storm in a highly competitive market 1 How is MAPFRE RE maintaining high levels of profitability in a soft market? Portfolio based on less volatile and stable business, with substantial profit and loss sharing mechanisms High portfolio diversification geographically a
Slide 99: Underwriting discipline in a challenging environment
04 MAPFRE RE Weathering the storm in a highly competitive market MAPFRE RE maintains underwriting discipline in a challenging environment . . . Constant Significant growth from Group business, mainly Origin Renewal Period Real Exchange Rates due to the acquisition of DL Italy and Germany January 0
Slide 100: Growth through alternative sources
04 MAPFRE RE Weathering the storm in a highly competitive market . . . and recent growth has been based on the search for alternative sources MAPFRE RE has been able to grow, without "Traditional" Special Transactions reducing underwriting standards Growth emanates from Special 1.145 100 605 752
Slide 101: How MAPFRE competes with large players
04 MAPFRE RE Weathering the storm in a highly competitive market 2 How does MAPFRE compete with large players in this challenging environment? MAPFRE RE has a very lean, flexible and effective organization that is able to work with the lowest possible expense ratio, without jeopardizing technical
Slide 102: Synergies MAPFRE RE brings to the Group
04 MAPFRE RE Weathering the storm in a highly competitive market 3 What synergies does MAPFRE RE bring to MAPFRE GROUP? MAPFRE RE writes a reinsurance book that is highly complementary to MAPFRE’s risk profile, adds diversification benefits and is highly profitable MAPFRE RE generates substantia
Slide 103: Market opportunities
04 MAPFRE RE Weathering the storm in a highly competitive market 4 What opportunities does MAPFRE RE see in the current market? Market challenges Opportunities Excess capacity Technology 103 Low rate environment Solvency II Industry consolidation Emerging Risks Regulatory changes New products Demogr
Slide 104: Key Takeaways
04 MAPFRE RE Weathering the storm in a highly competitive market Key Takeaways MAPFRE RE is a mature company with a very strong competitive position and a solid, stable and diversified portfolio of business MAPFRE RE is a core part of ERM policy at MAPFRE, through the management of global 104 CA
Slide 105: Investment Management
05 INVESTMENT Profitable growth 105 MANAGEMENT optimizing returns in a JOSE LUIS JIMÉNEZ low yield environment
Slide 106: Investment Management: Overview and topics
05 INVESTMENT MANAGEMENT Optimizing returns in a low yield environment 5 A O V E RV I E W Market Context Investment Portfolio 106 5 B TO P I C S F O R D I S C U S S I O N View on Interest Rates MAPFRE AM: Room for Profitable Growth
Slide 107: Market Context: a more positive scenario ahead?
05 INVESTMENT MANAGEMENT Optimizing returns in a low yield environment Market Context A more positive scenario ahead? Fears of deflation are coming Growth figures are being Commodities recovering, world trade seems to have to an end, but no high revised upwards, and much stabilized inflation in sigh
Slide 108: Brazil and Spain: best recent evolution
05 INVESTMENT MANAGEMENT Optimizing returns in a low yield environment Market Context Brazil and Spain, two of the countries with the best recent evolution and near term outlook Brazil has recovered Spain keeps ahead of investor attention forecasts 108 During 2014-2015, Brazil was in the middle of a
Slide 109: Investment portfolio: asset allocation
05 INVESTMENT MANAGEMENT Optimizing returns in a low yield environment Investment portfolio Asset allocation - MAPFRE GROUP Asset allocation - main European insurers Equities Mutual funds Unit Linked 1,532 (3%) 1,458 (3%) 1,853 (4%) Other Cash investments(2) 1,391 (3%) 2,134 (4%) 109 21% Property 2,
Slide 110: Fixed income portfolio by rating and seniority
05 INVESTMENT MANAGEMENT Optimizing returns in a low yield environment Investment portfolio Fixed Income portfolio – Fixed Income portfolio – breakdown by rating breakdown by seniority 4% 5% 2% 12% 9% 3% 6% 110 11% 85% 64% AAA AA A BBB BB or lower/ NR Senior Covered Other Subordinated ABS * Using fo
Slide 111: Modified duration well adapted to local business
05 INVESTMENT MANAGEMENT Optimizing returns in a low yield environment Investment portfolio Modified duration is well adapted to the local business needs Modified duration by segment Modified duration by region 8,2 7,9 8,3 8,2 8,2 7,4 7,2 7,8 7,3 7,3 7,2 7,5 7,4 7,3 6,8 7,1 7,0 6,6 6,8 6,9 6,6 6,4 6
Slide 112: Accounting yields have remained stable
05 INVESTMENT MANAGEMENT Optimizing returns in a low yield environment Investment portfolio Accounting yields have remained stable Accounting yield by segment Accounting yield by region 11,2 10,4 10,3 10,2 9,9 6,0 8,8 5,2 5,5 112 5,2 5,0 5,2 5,1 5,2 5,0 5,15,24,9 5,15,25,1 5,0 4,9 7,8 4,8 4,4 4,7 4,
Slide 113: Investment Management: Topics for discussion
05 INVESTMENT MANAGEMENT Optimizing returns in a low yield environment 5 A O V E RV I E W Market Context Investment Portfolio 113 5 B TO P I C S F O R D I S C U S S I O N View on Interest Rates MAPFRE AM: Room for Profitable Growth
Slide 114: Our view on interest rates
05 INVESTMENT MANAGEMENT Optimizing returns in a low yield environment Our view on interest rates Base Scenario: weak growth (but improving) Outstanding public debt in the Eurozone with negative interest rates low interest rates for a while slowly fading negative interest rates . . . 114 .
Slide 115: Spanish Life business less sensitive to interest rates
05 INVESTMENT MANAGEMENT Optimizing returns in a low yield environment MAPFRE´s Spanish Life business is less sensitive to interest rates compared to peers High portion of immunized portfolios in …has led MAPFRE to show an absence of Spanish Life business in Spain due to local mismatch in both durat
Slide 116: Managing a low yield environment
05 INVESTMENT MANAGEMENT Optimizing returns in a low yield environment Managing a low yield environment Existing room for further diversification in our balance sheet compared to our peers, combined with our strong Solvency II position, gives us capacity for increasing the weight of equities and alt
Slide 117: Positive evolution of MAPFRE AM
05 INVESTMENT MANAGEMENT Optimizing returns in a low yield environment Positive evolution of MAPFRE AM in the recent years . . . Evolution of AuM at MAPFRE’s asset Evolution of profit before taxes at MAPFRE management business Inversión* 15,2% 13,2% 13,0% 13,0% 12,3% 11,5% 117 EUR mn EUR mn 4.799 5.
Slide 118: Room for profitable growth in asset management
05 INVESTMENT MANAGEMENT Optimizing returns in a low yield environment . . . with significant room for profitable growth AuM in the asset management business over total insurance company assets 206% 190% 118 143% 125% 111% 93% 79% 81% 75% 12% Peer 3 Peer 1 Peer 2 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 P
Slide 119: Action plan for a potential rise in interest rates
05 INVESTMENT MANAGEMENT Optimizing returns in a low yield environment Action plan for a potential rise in interest rates Although under our base scenario (low for long) it is probably too early to hedge 119 interest rate risk . . . …and despite the fact that 66% of the portfolios in the Life bu
Slide 120: Key takeaways
05 INVESTMENT MANAGEMENT Optimizing returns in a low yield environment Key takeaways 1. More positive macro scenario ahead in our main regions 120 2. Continue with our prudent investment approach with ample margin for diversification 3. Life business not affected by swings in interest rates 4. Incre
Slide 121: Capital Management + Strategy
06 SOLVENCY+ Creating 121 CAPITAL shareholder value MANAGEMENT + STRATEGY Fernando Mata
Slide 122: Solvency + Capital Management; Strategy
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value 6 A S O LV E N C Y + C A P I TA L M A N A G E M E N T 6 B S T R AT E GY 122
Slide 123: Capital management focused on stability and dividend momentum
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value MAPFRE’s strong capital management is focused on capital stability and maintaining dividend momentum. . . • Strong Solvency II ratio • Low leverage (197% at June 2016) • Significant room for further • Financial Strength
Slide 124: Solvency II technical specifications
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value SOLVENCY II Technical specifications Scope of calculation Applied for: Standard formula calculation (internal Brazil: Solvency II, pending final models used exclusively for internal calibration (178% local solvency
Slide 125: Strong Solvency II ratio with limited volatility
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value Strong Solvency II ratio with limited volatility 198% 200% 197% 125 8,530 8,635 8,502 Tier 2: €624 mn (7%) Grandfathered 4,311 4,311 4,311 subordinated debt Unrestricted Tier 1: €7.88 bn (93%) 31.12.2015 31.03.2016 31.06
Slide 126: Clear and stable Solvency II adjustments
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value Clear and stable Solvency II adjustments . . . IFRS equity 10,408 11,179 31.12.2015 -197 30.06.2016 Participations not included under SII -199 -1,514 Subsidiaries under equivalence method & others -1,871 126 Intangible a
Slide 127: Composition of well balanced risks
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value . . . and a proper composition of well balanced risks that optimize diversification benefits . . . Market - breakdown 2,227 Interest rate 278 Market 2,227 Equity 576 Real Estate 746 Counterparty 780 Spread 656 Currency 7
Slide 128: Reduced sensitivity to market shocks
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value . . . leading to reduced sensitivity to market shocks Interest rate +100 bps -5 pts Interest rate -100 bps +8 pts 128 UFR 3.2% -1 pts EUR appreciation +10% -5 pts Equity markets -25% -3 pts Credit spreads +50 bps -11 pts
Slide 129: Ratings highly correlated with Kingdom of Spain
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value Ratings are highly correlated with the Kingdom of Spain . . . MAPFRE S.A. MAPFRE RE Y GLOBAL RISKS Kingdom of Issuer rating Financial strength rating Spain rating AA AA- A+ 129 A A- BBB+ BBB BBB- 2010 2011 2012 2013 2014
Slide 130: Solid capital structure with low leverage
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value MAPFRE has a solid and diversified capital structure with low leverage and best in class interest coverage . . . Interest coverage (x) (1) 34.5 Capital structure 20.8 17.7 16.5 15.1 14.8 14.6 Senior debt Bank debt 998 mn
Slide 131: Debt capacity and reduced interest cost
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value . . . and our debt capacity and the reduced interest cost shows a very positive outlook Cost of debt Financing outlook 118.1 110.6 107.3 Subordinated debt faces its first call 82.8 82.3 85.6 option in July 2017. -53% 1
Slide 132: Recurrent dividend upstream
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value Recurrent dividend upstream with major contributors in stable businesses and markets . . . Dividend coverage 1.5x 1.1x 1.1x 1.4x ratio €516 mn €442 mn €463 mn €573 mn €318 mn Total 132 Dividends 14% 8% 22% 21% 23% 12% up
Slide 133: Excellent capital positions
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value . . . with excellent capital positions MAPFRE ESPAÑA 286.3% Solvency II ratios MAPFRE VIDA 449.2% MAPFRE RE 234.7% 133 USA 239.6% Local Solvency BRAZIL 178.0% Ratios MAPFRE GROUP 197.0% Data as at June 30th 2016 CAPITAL
Slide 134: Resilient profitability despite adverse conditions
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value Resilient profitability, despite adverse market conditions . . . ROE 9.0% 10.1% 10.0% 8.0% 8.7% 7.8% 134 845 791 666 709 Net 591 572 income 2012 2013 2014 2015 9M 2015 9M 2016 Million euros CAPITAL MANAGEMENT + STRATEGY
Slide 135: Dividends grow during the period
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value . . . has allowed dividends to grow during the period Payout 50.9% 50.6% 51.0% 56.5% 135 400,3 431,1 400,3 Dividends paid 338,8 against results 2012 2013 2014 2015 Million euros CAPITAL MANAGEMENT + STRATEGY
Slide 136: Steadily growing equity base
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value At the same time, MAPFRE has steadily grown its equity base, thanks to resilient earnings growth and the way it has managed market volatility . . . +3.2% CAGR +4.5% 2012-15 9.153 8.899 9.084 9.158 9.373 8.389 8.574 7.810
Slide 137: Balance sheet currency diversification
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value . . . with a balance sheet diversification strategy which has proven successful with over 88% of net asset and liabilities denominated in strong currencies Net assets & liabilities – breakdown by currency Others Brazilia
Slide 138: Key takeaways
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value Key takeaways MAFPRE is fully committed to creating value for the shareholders, by 1 delivering growing and recurring profits, which are the main driver of sustainable dividends 2 Capital levels will depends on our risk
Slide 139: Solvency + Capital Management; Strategy
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value 6 A S O LV E N C Y + C A P I TA L M A N A G E M E N T 6 B S T R AT E GY 139
Slide 140: Profitable Growth
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value PROFITABLE GROWTH 140 Technical and Digital Client Culture and Operational Transformation Orientation Human Talent Excellence CAPITAL MANAGEMENT + STRATEGY
Slide 141: Revenue and ROE targets 2018
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value FY 2015 TARGET 2018 Q3 2016 COMMENTS Good performance in €21 bn €31 bn Spain, USA, Brazil, REVENUE €26.7 bn (+1.8%) ≈5% CAGR Excluding Venezuela: Turkey, Peru, Global +3.5% 141 Risks and MAPFRE RE 7.8% based on a div
Slide 142: Combined ratio, expense ratio and digital dispatch targets
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value FY 2015 TARGET 2018 Q3 2016 COMMENTS Spain – Outstanding COMBINED 96% Brazil – needs RATIO 98.6% 97.2% Spain – 96% improvement Brazil – 92% USA – On track USA – 98% 142 EXPENSE RATIO 28.6% 28.0% 28.0% Achieved
Slide 143: Digital business targets
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value FY 2015 TARGET 2018 Q3 2016 COMMENTS Positive development in DIGITAL Digital Business growing BUSINESS 1,500 890 by 6.8% above target PREMIUMS 1,000 (50%) (16.8%) (Spain, Portugal, (GROWTH) Mexico, USA, Colombia, 143 A
Slide 144: Diversity and mobility targets
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value FY 2015 TARGET 2018 JUNE 2016 COMMENTS % WOMEN IN DIRECTOR & 37.9% 40% 38.4% Above expectations 2016 Q2 HEAD POSITION 144 % STAFF WITH 1.3% 2% 1.3% Needs acceleration 2016 Q2 A DISABILITY FUNCTIONAL 5.95% Over 2,20
Slide 145: In Conclusion
0 6 C A P I TA L M A N A G E M E N T + S T R AT E GY Creating shareholder value I N C ONCLUSION We maintain our commitment to the set of objectives for the 145 three-year plan, to finish in December 2018. We are pretty sure that achieving these targets will contribute to enhancing the value for our
Slide 146: Closing Remarks
07 CLOSING Profitable growth 146 REMARKS on the path to delivery ANTONIO HUERTAS CLOSING REMARKS
Slide 147: Strategic Plan 2016-2018: financial and operating targets
0 7 C LO S I N G R E M A R K S Profitable growth: on the path to delivery Strategic Plan 2016 - 2018 Financial and operating targets Total Revenue (€ million) Combined Ratio (%) ROE (%) 31,000 >11.0 26,702 98.6 <96.0 8.0 147 2015 Target* 2015 Target* 2015 Target* Financial targets on track Proje
Slide 148: 2016 in figures
0 7 C LO S I N G R E M A R K S Profitable growth: on the path to delivery Strategic Plan 2016 - 2018 2016 in figures Revenue Expense ratio Loss ratio +3.8% -0.7 p.p. -0.8 p.p. 148 Combined ratio Financial income Shareholders´equity -1.5 p.p. +9.0% +6.2% Profit per employee Solvency II +16.3 p.p. 197
Slide 149: Positive trends in Spain, Brazil and USA
0 7 C LO S I N G R E M A R K S Profitable growth: on the path to delivery Current situation Positive trends in main markets SPAIN BRAZIL USA Economic recovery: Political stabilization Winter-related losses 149 GDP growth >3% Return to growth Geographic expansion Low interest rates Reco
Slide 150: Positive trends in Mexico and Turkey
0 7 C LO S I N G R E M A R K S Profitable growth: on the path to delivery Current situation Positive trends in main markets MEXICO TURKEY Solid presence in a Complicated political 150 market with high growth situation potential Motor tariff increases to Improvements in offset higher claims t
Slide 151: Role of Fundación MAPFRE
0 7 C LO S I N G R E M A R K S Profitable growth: on the path to delivery Role of Fundación MAPFRE Private global non-profit institution Fundación MAPFRE is governed by its Board of Trustees 151 MAPFRE´s main shareholder, with a 65% stake, guaranteeing the Group´s independence and shareholder
Slide 152: Corporate governance principles
0 7 C LO S I N G R E M A R K S Profitable growth: on the path to delivery Corporate governance Significant progress in the implementation of corporate governance measures Institutional Business and Organizational Principles Rigorous separation between MAPFRE and Fundación MAPFRE´s business activit
Slide 153: Recent changes to the Board of Directors
0 7 C LO S I N G R E M A R K S Profitable growth: on the path to delivery Corporate governance Recent changes to the Board of Directors Board of Gender Directors equality Entire Corporate 153 Generational 15 members structure replacement Women: 27% represented 2 years ahead of schedule target is 30%
Slide 154: Shareholder trust: commitment to transparency
0 7 C LO S I N G R E M A R K S Profitable growth: on the path to delivery Shareholder trust 154 Reinforce our Enhance data Develop a commitment to quantity and relations plan for transparency quality our shareholders CLOSING REMARKS
Slide 155: MAPFRE's social commitment
0 7 C LO S I N G R E M A R K S Profitable growth: on the path to delivery MAPFRE’s social commitment 155 A socially responsible Company committed to our environment, our clients, and our entire organization CLOSING REMARKS
Slide 156: 650 activities in 30 countries
0 7 C LO S I N G R E M A R K S Profitable growth: on the path to delivery MAPFRE’s social commitment 156 650 activities in 30 countries 17 million beneficiaries in 2015 CLOSING REMARKS
Slide 157: Transparency plan and climate change commitment
0 7 C LO S I N G R E M A R K S Profitable growth: on the path to delivery MAPFRE’s social commitment Commitment to Active Commitment against Transparency Plan climate change 157 Transparency is the best way Included in the Global to develop TRUST Climate A-List Carbon Disclosure Project / COP21 Pact
Slide 158: Commitment to employer and volunteering
0 7 C LO S I N G R E M A R K S Profitable growth: on the path to delivery MAPFRE’s social commitment Commitment to being a better Commitment to employer volunteering 158 Great Place to Work 765 activities in 23 countries Equal opportunity employer 4,400 employees CLOSING REMARKS