Mapfre Re returns to profit in Q4 amid BI uncertainty
Mapfre Re swung to a EUR36.8mn ($44.6mn) profit in the fourth quarter after posting a loss of EUR44.6mn a year earlier, but it warned of continued uncertainty about the outcome of BI-related disputes.
Fourth Quarter: The quarterly return to profit at Mapfre Re was driven by a 21.7-point improvement in the loss ratio, which took the combined ratio down more than 19 points to 94.9%. Earnings improved sharply on the prior-year period, when a recently assimilated Global Risks business had weighed down profitability. GWP within Mapfre Re’s non-life business edged marginally lower to EUR1.24bn in Q4 2020.
Full year: For the whole of 2020 Mapfre Re earnings fell 71% to EUR16.9mn following EUR39.3mn of losses from the Puerto Rico earthquakes as well as EUR79.8mn of Covid-related claims and reserves, including EUR61.7mn within Mapfre Re’s P&C business. Mapfre said the Covid-19 losses emanated mainly from BI policies in Germany, France, the UK and Switzerland. It said its BI coverage stipulated the need for material damage to make a claim in the “immense majority of cases” but it noted “a lot of uncertainty” about final claims given court or arbitration proceedings. The full-year combined ratio at Mapfre Re dropped 0.4 points to 100.6%.
Group: For Mapfre as a whole profit slumped 48% to EUR76.1mn for the October to December quarter, dragged down by a 19% decline in earnings in its dominant Iberia unit. Mapfre full-year earnings fell 13.6% to EUR526.5mn following write-downs on operations in Italy, Turkey and Indonesia and Covid-19 and catastrophe losses.