Mapfre Q3 nat cat costs exceed €1.1bn, cuts US presence
Spain-based Mapfre will pay out more than €1.1 billion to its clients in relation to the natural catastrophes occurred in the third quarter of 2017 and has announced a reorganisation of its international business and a reduction of its US presence.
Third-quarter nat cat events such as hurricanes in the Caribbean and the US as well as earthquakes in Mexico are estimated to have a net impact on Mapfre’s income statement of €176 million.
“I’d like to highlight Mapfre’s solvency and financial capacity to respond to our policyholders,” Mapfre CEO Antonio Huertas, told investors. “The specific impact of these disasters will not affect the company’s development,” he noted.
Furthermore, the company is reorganizing its US business to sharpen its focus on profitable growth, according to a press release. Mapfre plans to cease operating in five states: New York, New Jersey, Kentucky, Tennessee and Indiana. The company will continue operating in these states until it completes an “orderly exit”.
At the same time, the insurer has identified a number of priority states where it is positioned to exploit its economies of scale, infrastructure and network of independent agents to pursue a strategy of profitable growth, according to the statement. These states are Massachusetts, Connecticut, Rhode Island, New Hampshire, Maine, Vermont, Ohio, California, Oregon, Washington and Idaho. The company will also continue operating in Florida, Pennsylvania and Arizona, but wants to reinforce its underwriting and distribution base before embarking on future expansion plans.
At the same time, the Europe, Middle East and Africa (EMEA) operations and Asia Pacific (APAC) are to be integrated into a new regional area named Eurasia, which will be responsible for managing Mapfre’s business in Europe (except Iberia), the Middle East and Asia, integrating the current APAC and EMEA regional areas from January 2018.
The Eurasia regional area will be headed up by the current CEO of EMEA, Nikos Antimissaris, while the current CEO of APAC, Leire Jiménez Ayesa, has been appointed CEO of the Insureandgo and Abraxas businesses in the UK. Abraxas is Asistencia’s UK subsidiary covering the automotive industry, and Insureandgo is Mapfre’s online travel insurance business in the country.
In addition, Mapfre is creating a Latin American (LatAm) North sub-region to cover the whole of Central America, based in Panama. It will cover all of Mapfre’s activities in Central America (Panama, Honduras, El Salvador, Guatemala, Costa Rica and Nicaragua) and the Dominican Republic.
“The organizational changes we have introduced in the USA, Eurasia and LatAm North will help us drive forward our strategy of focusing on profitable growth,” Huertas explained.
Mapfre employs more than 37,000 professionals and services approximately 37 million clients worldwide. In 2016, its revenues exceeded €27 billion and its net profit amounted to €775 million.
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