Mapfre Sa Unsp/Adr

Good morning and welcome to MAPFRE's activity presentation for the first half of 2024. This is Leandra Clark, Head of Investor Relations. We want to thank you all for being here with us today. It is a pleasure to have here with us Fernando Mata, Vice Chairman and Group CFO, Jose Luis Jimenez, Deputy CFO, as well as Felipe Navarro, Deputy General Manager in the Finance area. As a reminder, we report the IFRS financial information twice a year, and we reported the half-year results to the CMV this morning. The information in this activity update is prepared under the accounting policies applicable in each country, unless stated otherwise. At the end of the presentation, we will go through the main IFRS KPIs. You can use the ask a question link at any point during the call, and we will open up the question and answer session at the end of the presentation. Let me turn the call over to Fernando. The floor is yours.

Thank you, Leandra. Good morning, everyone. Thank you all for being here with us. The figures we released this morning confirmed the strong trends that we saw in the first quarter, which have gained momentum, supported by our profitable growth strategy. We're growing strong in almost all markets and continue working to correct imbalances with visible improvements, especially in underperforming businesses. We're leveraging our proven business model with high levels of diversification as we continue growing in the most profitable segments. LATAM, especially Brazil, continues to be the largest contributor to earnings for the group with 203 million euros. Regarding lines of business, Life and General P&C are showing an excellent performance. There has been a strong turnaround in motor in North America and across Latin America. However, in Iberia and EMEA, we are still seeing pressure on claims costs, although behavior in recent months suggests that we should begin to see a change in trend. Regarding main regions and business units, Iberia maintains leading market shares in the main line of business with a 37% increase in the result. In North America, the result is up 58 million euros thanks to the already implemented technical measures. Maflerui continues to grow its profit supported by solid business growth and the absence of relevant net cut impacts with increased prudence in our reserves. We're proud to say that all financial KPIs are in line with the target set at the AGM in March. Premiums are up 5.5%, over 6% excluding life savings, reaching more than $15.1 billion with solid growth in Latam, Iberia, and North America, as well as reinsurance. The net result, which stands at $462 million, is up 47%. This strong performance is based on first, relevant improvement in all life with a 1.3 point reduction in the combined ratio to 95.7%. Second, the light business, especially in Latam and Iberia, which continues to contribute very positively to profitability. Lastly, the growing contribution of financial income, which for non-life reached 401 million, up 11.6%, and is also an important driver for the life business. With this result, we have delivered an ROE of 10.6%, 11.6%, almost 12, excluding the 2023 goodwill write-down. Regarding Solvency II, the ratio was 197.7% at March 2024, and we are no longer including transitional measures. That's all from me. Now I will hand the floor over to José Luis to run us through the main figures.

Thank you, Fernando, and thank you all for being here today. First, I would like to go over the main premium figures. Non-life premiums are up 6.5% to nearly 12 billion euros. with general P&C up over 4%, accidents and health 8% and auto 5.5%. Life premiums are growing around 2%, with savings flat after a really strong first half in Iberia last year. Life protection is growing well over 10%, with excellent performance in Mexico. The reinsurance segment is growing close to 9%. As you can see on this chart, our business mix is well diversified with around 79% in non-life and 21% in life, with important share in high margin businesses like life protection and general P&C. The main figures of our region are displayed on this slide and I will comment on the main trends. In Iberia, net profits stand at 168 million, with a return on equity of 13.5%. This includes 21 million euros from the sale of a property in Madrid, due to the regular portfolio rotation. Non-life is up 6.4%, with strong trends in homeowners, condominiums and health. Life savings premiums are down to an extraordinary 20-23, while protection is growing around 4%. LATAM continues to generate a large share of profits with 203 million and a return on equity of 17%. Non-life profitability has improved across the region and the life, business and financial income continue performing very positively. Regarding Brazil, profitability has been exceptional with a return on equity of 23% and the net result is up to 121 million, including a 5 million loss from the floods in Rio Grande do Sul. In local currency, premiums are up 1% and in euros reflect the slight depreciation of the Brazilian real. The non-life combined ratio is down significantly to 77%. with motor improvement 2.5 points and general pregnancy at an excellent 68.6%. The life protection business also had a strong contribution to results. The rest of the countries in LATAM maintained their strong profitability, contributing 82 million. Regarding North America, the net results have nearly 60 million, reaching 41 million compared to losses of 80 million the previous year. Underwater measures and strong tariff increases are the main drivers, with premiums up almost 5%, which continue feeding into P&L. The combined ratio is down over 8 points, now under 100%. In Puerto Rico, premium volume is slightly up with a net profit of nearly 10 million. In EMEA, the losses have improved by 6 million, down to 8. In Turkey, financial income is boosting results with a profit of over 50 million. On the other hand, outdoor remains challenging in Germany and Italy. In Maffei, premiums are up 5.5%. The combined ratio is down to 95% supported by tariff, especially for cut covers. So a reminder, this is a traditional formula ratio. All the reinsurances that are now reporting under IFRS may treat reinsurance commissions differently, typically posting lower ratios. The flooding in Rio Grande do Sul had a 41 million net impact. There has been no other relevant catastrophic events, but we are seeing an increase in secondary periods. Net profit is nearly 140 million, up 50%, and return on equity is over 12%. Modi continues growing and posts a net result of 3 million euros. I would also like to comment on two specific items. Hyperinflation had a 36 million impact, mainly from Argentina, and positive tax adjustment from previous year had a 25 million impact. On the right, you can see the combined ratios by segment. General P&C had an extraordinary performance. Premiums are up over 4%, and the combined ratio is down almost 3 points to around 83%. The net result was nearly 199 million, up 54 million. In Brazil, premiums are down 2%, with agro-temporary lower due to the subsidy allocation calendar. We expect premiums to catch up during the year. The net result of 70 million reflects a limited impact from Rio Grande do Sul. The combined ratio stands at an excellent 68.6%. In Iberia, premiums are up 7%, driven by homeowners and condominiums. The result is up 40% to almost 74 million, and the combined ratio is down 8 points to 95. North America reported a result of 21 million compared to 2 million in 2023, with an excellent combined ratio of 89.7 on the back of tariff adjustments in homeowners. Odela TAM also increased its contribution to the result by 70 million. In summary, General P&C, our largest line of business, is highly profitable and diversified. In autos, we are starting to see some green shots, in motor with a strong reduction in net losses, down from nearly 36 million last year to just 19 million. Iberia is still experiencing volatility, while tariff increases are gradually feeding into results. The turnaround in the US was noteworthy, with Brazil and North America now reporting profits. Other markets in Latin America are performing quite well, mitigating the complicated situation in Germany and Italy. The group's strategy is to focus on profitable growth. Framings are up 5.5%, with insured units down around 6%. as a result of selective underwriting. In Iberia, premiums were up 5.7%. The portfolio stands at around 6 million vehicles, down under 3%. We are focusing more on retail than fleets, in line with our risk appetite. There has been a relevant increase in the average premium, around 8.4%, with the market only up 7.8%. We are confident that we are now pricing above expected claim inflation. In North America, premiums grew almost 8%, with units down 5.6%. In Brazil, premiums are down 4.4%. The portfolio of vehicles is down 1%, where we also have a lower appetite for fleets. The group-auto combined ratio was 104.8%, improving 1.4 percentage points. Iberia reached 106 in the first half of the year. We are seeing some pressure on claim costs, especially in bodily injury, while material damage claims are very well controlled. Premiums are up 4.5%, still below the 6% growth rate, and will continue to catch up. In North America, the rate improved over 7.5 points and will also continue to come down based on tariffs. Just this quarter, we put through an additional 5% increase. Brazil's combined ratio is down 2.5 points to 101.6. We are committed to continue adjusting pricing as much as necessary, while defending our portfolio. Tariffs still need to end through P&L in certain markets. Brazil and the US have already improved, while Spain and EMEA will need some time to reach optimal profitability levels. Data in recent months make us more confident that we are on track. Now we move into the live business, which is another relevant profit contributor. Direct insurance premiums are up nearly 130 million. Saving is slightly down because of the extraordinary influence of Iberia in 2023, but it still stands at over 1.5 billion euros, while protection is growing over 10%. In Iberia, life protection is up 4%, outperforming the market, with a combined ratio improving over 1.0 to 67.9%. The financial result was strong with net realized gains up from 2 to 30 million due to the sale of real estate as well as recurring financial gain. In Brazil, life protection premiums are up over 6% in local currency and the combined ratio stands at 82.4%, up two points, reflecting higher commission but still at excellent levels. In the rest of LATAM, life insurance is up 35%. Mexico stands out with 60% growth in life protection. The reliable result for the life business reached 167 million, up 37%. Now I will hand the floor over to Felipe to discuss the main BALAM seed items.