Mapfre adds reinsurance capacity to capture hard market

Spanish-based insurance group  Mapfre will bolster its reinsurance unit to the tune of €250 million to better take advantage of the hardening market, including into the 1.1. renewals.

The goal is to make the reinsurance unit, Mapfre Re, “able to offer greater reinsurance capacity to its clients in the market, while also giving it greater flexibility to structure its own reinsurance protections, thereby optimising underwriting risk at a time when rising demand for coverage is driving rates upward.”

“We are going to have more capacity to provide coverage to our customers at a time when the presence of solvent operators with a vocation for long-term service is required,” Mapfre Re CEO Eduardo Pérez de Lema said.

That capacity “will allow us to grow at a time of improved technical conditions in the market while maintaining our traditional prudent management of the business.”

Mapfre will fund the €250 million capital increase for its reinsurance unit by scraping up funds on hand following recent exits from bancassurance agreements, management said. Mapfre’s stake in the unit will rise to 94.43% as a result of the deal.

Mapfre calls the reinsurance units its second largest contributor to group earnings behind the Spain operation. Over the last 15 years, Mapfre Re has contributed accumulated earnings after taxes of more than €1.7 billion to its parent group.

Capital increases into the 1.1 2023 renewals have been a rarity. Beazley made the largest wave to date with word of a £350 million equity raise.

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