LONDON--(BUSINESS WIRE)--A.M. Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “a+” from “a” and affirmed the Financial Strength Rating of A (Excellent) of MAPFRE España, Compañía de Seguros y Reaseguros S.A. (MAPFRE España) (Spain). MAPFRE España is a subsidiary of MAPFRE S.A. (MAPFRE), the non-operating holding company of the MAPFRE group. The outlooks of these Credit Ratings (ratings) remain stable.
The ratings reflect MAPFRE España’s balance sheet strength, which A.M. Best categorises as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management. The ratings also factor in MAPFRE España’s strategic importance to MAPFRE, as key contributor of premium revenue and earnings for the group. MAPFRE España is the group’s engine for writing non-life business in the Iberian Peninsula and is strongly integrated within the MAPFRE group.
The Long-Term ICR upgrade reflects MAPFRE’s improved rating fundamentals, characterised by a very strong balance sheet, a strong operating performance, with solid earnings from its Spanish insurance and global reinsurance operations, and a favourable business profile. The sustained improvement in Spain’s macroeconomic conditions over recent years also has benefitted the group’s rating fundamentals positively.
MAPFRE España’s balance sheet strength is underpinned by its risk-adjusted capitalisation being at the very strong level, as measured by Best’s Capital Adequacy Ratio (BCAR). A.M. Best’s assessment also considers MAPFRE España’s prudent reserving practices. Furthermore, MAPFRE España’s capital position is protected against the occurrence of most local catastrophe perils, as the majority of these events are covered by Spain’s government’s national scheme (Consorcio de Compensación de Seguros).
MAPFRE España has a track record of strong operating performance, as evidenced by a five-year weighted average (2013-2017) return on equity, as calculated by A.M. Best, of 11.3%. Technical performance remained excellent in 2017, generating a combined ratio of 93.5%, as calculated by A.M. Best, despite an increase in adverse weather-related events in the first half of the year. A.M. Best expects MAPFRE España’s operating performance to remain strong supported by disciplined technical underwriting and resilient investment results.
MAPFRE España has a strong position in Spain as the market-leading non-life insurer, specialising in motor, third-party liability and homeowner insurance. The company’s business profile is supported by its diverse distribution capabilities, including an extensive agent distribution network across the Iberian Peninsula that allows excellent access to business and assists in maintaining a leading position in a highly competitive operating market.
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