MAPFRE takes €571m in cutting bancassurance chord with Caixa-Bankia, seeks better terms

MAPFRE has cut its bancassurance deal with Caixabank, taking €571 million for the jointly held unit and distribution deal. But it will also now go to an arbitration court for a potential further €52 million,  MAPFRE said in a statement.

Termination of the bancassurance deal was triggered by the 2021 announcement of a tie-up between Caixabank and MAPFRE's to-date bancassurance partner Bankia with whom it co-owned the Bankia Vida unit.

The €571 million payment to-date goes towards the valuation of the 51% of the Bankia Vida jointly held unit and the commercial agreement for the sale of non-life insurance.

But sides differ on how to value the Bankia Vida business, MAPFRE said, citing a very stable profit and dividend history from the unit and the perpetual exclusivity of the distribution agreement inconsistent with the 4.4x P/E inherent in the current valuation.

MAPFRE will book €171 million in profit on the deal which the Spanish group said it would utilize to "adapt and improve the operational efficiency of its operations in Spain and Italy, as well as optimizing the financial structure of the group." Some €100 million will be put to a voluntary retirement program for the coming two years.

Those efficiency efforts should render at least €161 million in savings over the next five years, MAPFRE said.

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