Mapfre Sa Unsp/Adr

Good morning and welcome to MAFRE's activity update for the first half of 2026. This is Felipe Navarro, Deputy General Manager of the Finance Area. Thank you very much for joining us. First of all, I would like to apologize for releasing results earlier than expected, but we had to wait for the closing of the Nasdaq. We are pleased to have with us Antonio Huertas, Group Executive Chairman, who will open the presentation with some remarks on the recently announced acquisition, as well as an overview of recent trends. He will be followed by José Luis Jiménez, our Group CFO, who will give us a brief overview of IFRS figures, which will report to the CNMV on a half-year basis, and will discuss the main financials under local accounting. Jaime Tamayo, the CEO of North America, will discuss the details of safety acquisition. I will walk you through the balance sheet and solvency data. You may submit questions at any point during the call using the Ask a Question link, and we will address them during the Q&A session at the end of the presentation. I will hand the floor over to Antonio.

Thank you, Felipe. Good morning everyone and thank you for joining us today. We are pleased to report that MAFRE has delivered solid performance with clear growth in profitability for the first half of 2026. Net profit reached 624 million euros, reflecting excellent performance across our core markets. Iberia and MAFRE were important contributors to earnings growth, while North America and Brazil also reported higher profit. This performance is supported by a diversified and resilient business model, as well as by the technical discipline reflected in our underwriting, pricing, and reserving decisions. At the same time, MAFRE maintains a position of financial strength, We continue to benefit from strong solvency, a growing equity base and a prudent approach to reserving. This gives us the flexibility to keep investing in the business while maintaining a conservative approach to capital and risk. In that context, I am proud to announce the acquisition of Safety Insurance, which is fully aligned with our strategic objectives. The transaction strengthens our leadership in Massachusetts and in several states in the attractive Northeast region, increasing our exposure to mature and stable markets and supports our growth objectives in businesses that we already know well and where we have been operating for decades. Furthermore, it is expected to be accretive and cash-generating for year one, and to increase the group's net income by over 5% once fully integrated. The funding of the deal will optimize our capital structure, creating significant value for shareholders. Jaime Tamayo, our North America CEO, will provide further more details later on. With safety reinforcing our strategic direction, I'd now like to spend a few minutes on the key figures, which show that MAFRE is on track to meet the updated targets announced at the March AGM. Premiums are up over 1%, and I'd like to highlight that the currency effect is beginning to turn positive. What's more, our profitability continues to improve. The non-life combined ratio stands at an excellent 92.8%, down both year-on-year and quarter-on-quarter, and even below our updated target range of 93% to 94%. The net result is up over 9% and the adjusted ROE is well over 13%, which puts us firmly on track to achieve our target for the final year of the strategic plan. We maintain a strong solvency ratio of 206.8% as of March, above the midpoint of our target range. I will now hand over to José Luis, who will walk you through the details of the first half.

Thank you, Antonio. Before we move on to the local figures, I would like to briefly comment on the main IRFS KPIs, which are very aligned to local GAAP. Insurance revenue stands at almost 14 billion, up around 4%. The net result amounts to 646 million under IFRS, exceeding local GAAP by 22 million. RFS 17 had positive impact of 17 million, discounting offset a negative impact from the risk margin and loss component, and other differences. RFS 9 had a positive 5 million impact, The positive mutual fund valuation book in P&L offset the realized gains on equity recorded under OCI. The holders' equity is just over 10 billion and the return on equity is 12.4%, consistent with local GAAP. The gross CCM is broadly unchanged, around 2.6 billion euros and 1.7 billion after tax and minorities. The 90.4% combined ratio under FRS is below the local figure, mainly due to the scant factor which had around a two-point impact. Let me now turn to the main highlights of the profits and loss account, now focusing on local GAAP. Starting with non-life, premiums reached €12.3 billion, up 0.3%. The non-life technical result increases to €648 million, up over 9%, supported by prudent management as well as an absence of relevant events. The combined ratio improved to 92.8%. The improvement is driven by the loss ratio of 65%, down nearly one point, while the spend ratio stands at 27.8%. Non-life net financial income increased over 70 million, supported by high portfolio deal and active portfolio management. Gross realized gains amount to $49 million in the first half of the year, around $50 million more than in 2025. Most of these gains were realized in the first quarter. The results of the non-live business reached $1.1 billion, up over 10%. Turning now to the live business. Premium reached $3.8 billion, growing nearly 4%. Life savings premiums are down due to a relevant corporate policy in Iberia issued in the second quarter of 2025, which is affecting the year-on-year comparison. Excluding this policy, life premiums will be growing 15.5%. Life protection continues growing especially in Brazil, Mexico and Iberia, with a combined ratio under 88%. Gross realized gains reached close to 20 million euros, up 6 million year-on-year. The results of the live business reached 354 million, up 2%. The results from other business activities, which mainly include holding company items and financing expenses, has improved compared to the previous year. Hyperinflation adjustments are up 8 million euros compared to last year, mainly due to a higher adjustment in target. Let me now take you through the performance of the different regions and business units. Overall, Iberia delivered solid performance, driven by technical improvements and a well-diversified business model. Net results reached 279 million euros, up 17%. Total premiums remained stable. Non-life premium growth is supported by motor and accidental health. General RPC is impacted by extraordinary transport issuance in the first quarter of 2025. Life premiums were lower due to a comparison commented before. Excluding this operation, growth will be 18.8%. The combined ratio is down over two points to 194% and the return on equity is now close to 15%. Immortal earnings has doubled year-on-year to 74 million, while the combined ratio is down around 4 points to under 95%, although there is a slightly higher frequency compared to the previous quarter. Premiums are up close to 2%, supported by a rise in the average premium of around 4.3%. The vehicle fleet is only slightly down year-to-date, showing clear signs of stabilization. The accident and health business is also delivering solid performance, with a noteworthy combined ratio under 94%. In general P&C, premiums declined by 2%, mainly due to extraordinary issuance in the transport line in the first half of 2025. Excluding this impact, premiums will be up over 1%. Additionally, the combined ratio improved by 2 points, despite the impact of the first quarter storms. Brazil continues to be an excellent contributor to profitability. The net result reached 136 million, up 4%, and the return on equity stood at an excellent 25%. Premiums surpassed 2.2 billion euros, up 4%. After several quarters of depreciation, the real is now a tailwind. Up 4.8% year-on-year. Growth at cost and exchange rate is slightly down, 0.7%, still impacted by the effect of high interest rates on credit-linked insurance, mainly agro and life protection. Other general P&C lines contribute positively to growth, and the combined ratio stands at an excellent 65.7%, supported by agro, which remains below 60% in line with previous quarters. Regarding the life business, life protection premiums are growing over 4% in euros, and earnings are up 9%, with a combined ratio of around 85%. Ode La Tam is reporting solid growth with premiums up over 6% to 3.1 billion euros, supported by the strong life and accident and health volumes which offset lower issuance in property, where policies are often dollar-delimited. The combined ratio stood at 99%, up nearly four points, driven mainly by motor and accident and health, where we are seeing higher claim costs which will be gradually offset with tariff adjustments. In Mexico, premiums are up over 13%, with life growing 90% and accident and health growing 40%. The result is just over 9 million. In Peru, premiums reached 454 million euros, up 6.6% with net results of 29.6 million euros. In Colombia, premiums are down 2% to 275 million, with a net result of 7.2 million euros. North America continues to show solid performance and improved technical profitability with the net result up 40% to 69 million. The combined ratio continues to improve with general P&C at an outstanding 80.6%. Premiums are down just under 7% affected by the US dollar depreciation. The Bitcoin fleet is showing signs of a return to growth reaching 1.2 million Bitcoins, up 0.3% year-to-date. Mufflery includes both reinsurance and global risk. Premiums reach €4.3 billion, down 1.5%. Both businesses have been affected by the reduction in market rates, while global risk has also been impacted by currency depreciation, as around three-quarters of policies are dollar-denominated. The combined ratio improved to 95.2%, down 0.7 points. There were no claims with relevant losses during the first half of the year, except for the storms in Portugal and Spain last February. Regarding the earthquake at the end of June in Venezuela, we have made a conservative estimate of an attributable loss of around 25 million euros, based on currently available information. Reserves remain in the upper end of the confident interval, with a two-point impact on the June combined ratio, with no additional prudence during the second quarter. The non-live financial result was up 42%, supported by solid investment yields, a higher net realized gains of 26 million compared with 6 million in 2025. In EMEA, growth is supported by Germany and Italy, partially offset by the 12% currency depreciation in Turkey. Results have been impacted by reserve strengthening in Italy, leading to a 4.6 million loss for the region, despite the strong turnaround in Germany. The non-life compound ratio is stable year on year, driven mainly by motor, with Germany below 100%. General PNC still reflect the impact of the floods in southern Antakya in the first quarter. In Antakya, the business remains conditioned by hyperinflation adjustments. Financial income continues to benefit from high interest rates. I will now hand the floor over to Jaime to work us through the details of the safety insurance acquisition.