S&P: Mapfre Group outlook revised to positive

S&P: Mapfre Group outlook revised to positive

S&P Global Ratings has upgraded its outlook on Spain-based insurer Mapfre Group to positive from stable, citing improvements in capital adequacy and earnings generation. The rating agency affirmed its 'A+' long-term issuer credit and financial strength ratings on Mapfre Re, Compania de Reaseguros, S.A., and its 'A-' long-term issuer credit rating on Mapfre S.A. Additionally, S&P maintained its 'A-' issue rating on Mapfre’s senior unsecured debt and 'BBB' issue rating on the group’s subordinated debt [1].

The outlook change reflects S&P's expectation that Mapfre’s capital adequacy will structurally exceed the 99.95% confidence level according to its model. The agency also anticipates sustained profitability with relatively low volatility. Mapfre has implemented various measures to enhance underwriting standards across its segments, including Spain, the U.S., Brazil, and various Latin American countries, as well as its global operations. The group’s broad diversification across countries and business lines has resulted in strong performance, with net earnings of €1.6 billion in 2024, up from €1.3 billion in 2023, and a return on equity of 16.2% [1].

S&P projects that Mapfre’s operating performance will remain sound with a return on equity (ROE) above 13% and a combined ratio below 94% in the coming years. The rating agency could upgrade Mapfre over the next 18-24 months if capital adequacy remains above the 99.95% confidence level and operating performance continues to compare well with 'AA-' rated peers. Conversely, S&P could revert to a stable outlook if capital adequacy declines below the 99.95% confidence level, performance deteriorates, or if Mapfre no longer passes S&P’s sovereign default test [1].

References:
[1] https://www.investing.com/news/stock-market-news/sp-global-revises-mapfre-group-outlook-to-positive-on-stronger-capital-93CH-4141771