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Equity StoryOctober 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
SolvencyIntegrity
Vocation for serviceInnovation for leadership
Committed team
To be the trusted global insurance company
3
Global player
+26 Minsurance clients
13,024branches*
+79,000distributors
+34,000employees
+177,000providers
*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
4Information to June 2020
MotorP&C
LifeReinsurance
Health & Accident
26%28%19%22%5%
IBERIA
LATAM INTERNATIONAL
MAPFRE RE
ASISTENCIA
6.3%
NORTH AMERICA
EURASIA
9.0%7.2%
BRAZIL
LATAM NORTH
LATAM SOUTH
13.1%
5.9%
6.4%
Reinsurance
Global Risks
17.2%
6.3%
NORTH AMERICA
EURASIA
9.0%7.2%
BRAZIL
LATAM NORTH
LATAM SOUTH
13.1%
5.9%
6.4%
Reinsurance
Global Risks
17.2%
23.6%
15.3%
2.7%
32.2%
26.2%
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 (surpassing the goal of 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• 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, 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 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)
- MAPFRE ESPAÑA - - A (Stable)
- MAPFRE ASISTENCIA - A+ (Stable) -
2
Results 6M 2020
8
Figures at a glance
13.3 BN 271 M 5.9%
6.6%
9
Results6M 2020
Excluding 2019 goodwill
writedowns
SOLVENCY RATIO
184%At 06.30.2020
Robust and resilient
solvency position
293 M-21.9% at constant
exchange rates
96.7%
93.8% in insurance units
(-2.1 p.p.)
11 BN
Variation vs. June 2019, except for the ROE which is compared to data at 12.31.2019Figures in €
at constant exchange rates
at constant exchange rates
-7.6% -7.7%
Consolidated revenue
-11.8%Premiums
-12.3%Attributable
result
-27.7%ROE
-1.3 p.p.Combined
ratio
+0.8 p.p.
Total premiums & consolidated revenue
10
Results6M 2020Earnings breakdown
*Includes other activities, expenses from holding companies, and hyperinflation adjustments
Figures in million €
8,763
2,2201,226 1,069
Non-Life Life Financial Other revenue
-9.7%
-21.4%-24.9% 20.1%
Total premiums
10,983-12.3%
Consolidated revenue
13,277-11.8%
445
225
-134 -130 -135
271
Non-Life Life Other concepts* Taxes Non-controllinginterests
Net earnings
-22%
-11%
77% -37% -19%
-28%
3,978
1,612
887727
1,116
776
2,910
338
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
-8.3%
-21.6%
-29.2%-10.0%
-8.2%
-18.4%
3.8%
-25.3%
LATAM3,225-21.6%
INTERNATIONAL1,892
-12.7%
Distribution by business area
11
Premiums Attributable result
Figures in million €
Results6M 2020
221
60 4427
5323
-52-13
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
-4.6%
23.4% 50.8%6.4%
16.8%-- -- --
LATAM131
26.8%
INTERNATIONAL76
69.3%
12
Results
6M 2020
Source: MAPFRE Integrated Report 2019 & Financial Report June 2020 and ICEA ranking to June 2020Figures in million €
Attributable result
Combined ratio
Premiums
€4.0 bnIberia
-8.3% in premiums
€221 mn-4.6% in results
93.8%Stable combined ratio
11.8%-0.8 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 (32% of total premiums)
#1 in Direct Insurance, #1 in Motor with a 19% market share
Key strategic initiatives: strengthen the MAPFRE NETWORK as well as alternate distribution networks, large cities, digital health (Savia), better client experience, families, companies
6M 2020 results reflect the impact of COVID-19
Remarkable growth in several Non-Life segments, with strong profitability trends
even with a prudent balance sheet approach
93.1% 94.8%99.9%
81.0%
107.2%102.4%
Motor General P&C Health & Accident
6M 2019 6M 2020
66
160
-17 -3Life Motor General P&C Health &
Accident
---
95.7%
---
6.9%887
1,0861,208
660
Life Motor General P&C Health &Accident
-31.2%
7.7%
-5.8%
3.9%
60
44
27
BRAZIL LATAMNORTH
LATAMSOUTH
23.4%
50.8%
6.4%
13
Results
6M 2020
Attributable result
Combined ratio
Premiums
Source: MAPFRE Economics, Integrated Report 2019 & Financial Report June 2020Figures in million €
*Ex-PEMEX+9.9%
€3.2 bn-21.6% in premiums
€131 mn+26.8% in results
89.6%-3.2 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 26% of total Group premiums
6M 2020 results reflect the impact of COVID-19
Positive performance in Brazil, Mexico, Panama and Colombia, despite currency
effect, but top-line affected by lower business activity
Latam
12.7%+2.1 p.p. in ROE
91.6%
93.1%
95.7%
88.8%87.8%
93.9%
BRAZIL LATAM NORTH LATAM SOUTH
6M 2019 6M 2020
1,612
887727
BRAZIL LATAM NORTH LATAM SOUTH
-21.6%
-29.2%-10.0%
14
Results
6M 2020
Source: MAPFRE Economics, Integrated Report 2019 & Financial Report June 2020Figures in million €
Attributable result
Combined ratio
Premiums
Second largest market for MAPFRE based on contribution to business
It represents 13% of total Group premiums
#2 in the Non-Life group ranking in Brazil, with a 12.5% market share
Strategic alliance with Banco do Brasil since 2010
6M 2020 results reflect the impact of COVID-19
Relevant improvement in results thanks to lower frequency in Auto and the fruits of the
strategic initiatives implemented over the last years
Brazil€1.6 bn-21.6% in premiums
€60 mn+23.4% in results
88.8%-2.8 p.p. in combined ratio
12.0%+2.4 p.p. in ROE
233
768
577
Motor General P&C Life-Protection
-49.5%
-6.3%
-20.3%
6
29
18
Motor General P&C Life-Protection
156.6%
-21.3%
-19.0%
91.6%
107.2%
75.9%
88.8%
102.5%
78.8%
Non-Life Motor General P&C
6M 2019 6M 2020
15
Results 6M 2020
Attributable result
Combined ratio
Premiums
Source: MAPFRE Economics, Integrated Report 2019 & Financial Report June 2020 Figures in million €
INTERNATIONAL comprises the regional areas of North America and Eurasia
It represents 15% of total Group premiums
North America:
Encompasses operations in the United States and Puerto Rico
Produces 9% of total Group premiums
Leading provider of motor, homeowners and commercial lines in Massachusetts
Eurasia:
Includes Italy, Germany, Turkey, Malta, Indonesia and the Philippines
Contributes 6% of total Group premiums
#6 in Non-Life; #11 overall Europe
6M 2020 results reflect the impact of COVID-19
Significant improvement in results in USA, Turkey, and Italy, thanks to a focus on
underwriting discipline, as well as a significant decrease in Motor frequency
International€1.9 bn-12.7% in premiums
€76 mn+69.3% in results
98.4%-4.3 p.p. in combined ratio
100.0%
107.9%
99.1%
97.1%
NORTH AMERICA EURASIA
6M 2019 6M 2020
53
23
NORTH AMERICA EURASIA
16.8%
--
1,116
776
NORTH AMERICA EURASIA
-8.2%
-18.4%6.0%+1.3 p.p. in ROE
16
Results
6M 2020
Attributable result
Combined ratio
Premiums
Source: MAPFRE Integrated Report 2019 & Financial Report June 2020 Figures in million €
Profitability measures implemented over the last years positively impact results
United States€897 mn-10.1% in premiums
€66 mn+87.2% in results
95.8%-5.3 p.p. in combined ratio
Main market: Northeast (Massachusetts)
Restructuring measures:
2018: exit from 5 states
2019: exit from corporate lines except in Massachusetts
2020: exit from Arizona and Florida, as well as traditional business in Pennsylvania where we only continue to operate in digital business
Positive performance of Auto business
6M 2020 results reflect the impact of COVID-19
98.0%
103.7%
92.4%
88.8%
Northeast West
6M 2019 6M 2020
76
7
-10 -7Northeast West Exit businesses Verti
64.1%
181.1%
0.7%-53.9%
800
50 45
Northeast West Exit businesses
-6.2%
-24.8% -41.3%
Premiums by region
Premiums by line
Results
6M 2020Attributable result
17Source: MAPFRE Integrated Report 2019 & Financial Report June 2020Figures in million €
Combined ratio It comprises the reinsurance and global risks
businesses
It represents 24% of Group premiums
It operates through a global network of 19 representative offices
#16 reinsurer worldwide by premium volume*
6M 2020 results are affected by COVID-19 impacts, as well as by earthquakes in Puerto Rico and storm Gloria in the Northeast of Spain
Manageable COVID-19 exposures, supported by prudent approach and financial strength
MAPFRE RE€2.9 bn+3.8% in premiums
-€52 mn-160.9% in results
106.7%
-4.6%-7.9 p.p. in ROE
+12.1 p.p. in combined ratio
(*) Source: S&P Global Ratings
20.0%
39.0%
27.2%
13.8%
Iberia Eurasia Latam North America
38.8%
15.7%
27.0%
11.4%
4.2%2.8%
P&C Auto Global Risks business
Life & Accident Other lines Transport
-48
-4
Reinsurance business Global Risks business
---157.4%
93.5%
106.9%106.5%
109.1%
Reinsurance business Global Risks business
6M 2019 6M 2020
Results
6M 2020
18
The Unit is specialized in travel assistance and other Group specialty risks
Strategic restructuring with the closure of MAPFRE ABRAXAS operations in the UK and of ROAD AMERICA operations in the United States
6M 2020 results reflect the impact on Travel insurance in the United Kingdom, Australia and Ireland resulting from the COVID-19 crisis
Asistencia business restructuring, focused on geographic reorganization and cancellation
of unprofitable business
MAPFRE ASISTENCIA€338 mn-25.3% in premiums
-€13 mn-138.8 in results
100.3%-2.9 p.p. in combined ratio
Source: MAPFRE Integrated Report 2019 & Financial Report June 2020
Figures in million €
Gross operating result by region and business line
REGION ASSISTANCETRAVEL
INSURANCE
SPECIALTY
RISKS
2020 2019UK, FRANCE & BELGIUM 0.0 -6.9 -1 -7.9 -10.7
REST OF EURASIA 4.7 -6.4 0.8 -0.9 5.8
LATAM -1.4 -1.7 1.6 -1.5 2.2
NORTH AMERICA -0.8 0.6 2.5 2.3 0.5
TOTAL 2.5 -14.4 3.9 -8.0 -2.2
TOTAL
3
Balance sheet and solvency
19
20
Balance sheet & investment portfolio
72.5 70.2
12.31.2019 06.30.2020
Investment portfolio
Assets under management
Total assets
Figures in billion €
28.4
9.5
2.4
2.51.6
2.7
2.3
2.0
51.3
Government fixed income (55.3%)
Corporate fixed income (18.5%)
Real Estate (4.7%)
Other investments (4%)
Cash (5.2%)
Mutual funds (3.1%)
Equity (4.8%)
Unit Linked (4.5%)
Spain 17.7
Italy 2.9
Rest of Europe 1.8
United States 1.6
Brazil 2.1
Rest of LATAM 1.7
Other 0.6
12.31.2019 06.30.2020 % Δ
Assets under management 63.6 60.9 -4.3%
of which:
Investment portfolio 53.5 51.3 -4.1%
Pension funds 5.5 5.3 -2.7%
Mutual funds & other 4.6 4.2 -9.2%
Capital structure Leverage (%) (1)
Interest coverage (x) (2)
(1) Total Debt / (Total Equity + Total Debt)(2) Earnings before tax & financial expenses (EBIT) / financial expenses
Shareholders’ equity (billion €)
Capital structure & credit metrics
12.31.2019 06.30.2020
8.3
8.8
21
17.3
13.8
12.31.2019 06.30.2020
22.724.3
12.31.2019 06.30.2020
Equity 76%
Senior debt8%
Bank financing7%
Subordinated debt9%
12.6
billion
€
Solvency margin
22
High quality capital base
Tier 1: 86%
Tier 2: 14%
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 €
4.7 4.8 4.7
8.8 9.0 8.7
12.31.2018 12.31.2019 06.30.2020
Solvency Capital Requirement Eligible Own Funds
189.5%
173.2%
186.8% 183.8%
170.6%172.3%
4
Strategic Plan
2019-2021
23
Transforming for growth and improved profitability
Strategic Plan 2019-2021
24
* Excluding NatCat
Strategic Plan 2019-2021
Excellence in technical & operational management
Client Orientation Culture and talentProfitable growth
VALUE CREATION
8-9%Average ROE*
REVENUE GROWTH
€28-€30 bnBy 2021
+5% premiums annual average
on a like-for-like basis
LIFE PROTECTION
Premiums +8%annual average
on a like-for-like basis
NON LIFE
96-97%Average combined ratio*
Non Life expense ratio
≈28%
DIGITAL BUSINESS
+41% revenuein the 3-year period
QUALITY MEASURE
73%of measured business with NPS®
outperforming competitors
INNOVATIONsolutions to
1 million clients
75%By 2021
(starting from 63%)
GENDER EQUALITY
45%of openings in leadership positions filled by women
INCLUSION
3%of workforce comprising people
with disabilities by 2021Open, flexible and global
Technology Advanced Analytics
Automated Transactions
+10 mn
200% +/- 25 p.p.
Solvency II ratio
Increase productivity of
distribution channels
25
Reference framework
Strategic Plan 2019-2021
26
Solvency II> 200% (+/- 25%)
Leverage/debt > ≈ 22%
Pay-out ratio > 50% lower range
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
29Information to June 2020
Commitment to shareholders
On June 25, the final dividend of 0.0858 euros gross per share was paid, after having proportionately applied the amount corresponding to treasury stock to the remaining shares.
The cash dividend paid against 2019 results and adjusted for treasury stock reached 0.146 euros gross per share.
Shareholder distribution Stable dividend
Share performance
December 31, 2019 – June 30, 2020At June 30, 2020
Market cap 4.9 BN €
January – June 2020
MAPFRE -32.9%
IBEX 35 -24.3%
Stoxx Insurance -22.6%
Spanish banks -40.7%
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, MSCI Spain, FTSE All World Developed Europe Index, FTSE4Good, FTSE4Good IBEX and Dow Jones Sustainability World indexes.
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 Garcíade la SantaInvestor 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
