FINANCE | 12.14.2020
MAPFRE holds its first virtual meeting with more than 200 private shareholders
Fernando Mata, MAPFRE CFO, emphasizes the group’s commitment to its shareholders in maintaining the dividend policy
The money from the break with Bankia will be invested in the development of Digital Business, in the core countries and bancassurance agreements
The Director highlights the good progress of the asset management business, with 100 million in net contributions in pension funds and plans
Yesterday, MAPFRE held a virtual meeting “MAPFRE. A unique value” with small shareholders to offer them a glimpse of the latest results for the first nine months of the year, and give them the chance to ask questions about the group’s business. This is the first online presentation, given the circumstances of the pandemic, although MAPFRE has in fact been carrying out this exercise in transparency since 2017 and it has held ten meetings since then, both in Madrid and Barcelona.
Fernando Mata, MAPFRE CFO and member of the Board of Directors, and Natalia Núñez, Investor Relations and Capital Markets Director, took charge of sharing the group’s latest income statements. “I would like to highlight MAPFRE’s resilience during this complicated period,” Mata said.
He recalled that, during this period, MAPFRE had implemented a specific strategy based on three protective principles: guaranteeing the health and well-being of our employees and collaborators; strengthening our commitment to our policyholders and shareholders; and guaranteeing the continuity of our business model through solvency and capital strength.
During these troubled times, the share price has suffered. But, as the CFO acknowledged, “we have seen a glimmer of hope” in recent weeks. “As of the end of the third quarter, the share price was performing better than comparable ones. Even so, capitalization remains far from where it should be, far from the value where the company should be at,” he added.
Mata wanted to highlight MAPFRE’s commitment to its shareholders. Thanks to the results obtained and the strong financial position of the Group, the Board of Directors decided to approve a remuneration of 5 cents per share, 13.5 cents per share over the year or equivalent to 416 million euros. “MAPFRE will not sway in terms of its commitment or dividend policy, provided that we are in a situation that does not undermine the balance sheet,” he reassured.
The shareholders also asked about the outcome of the situation between MAPFRE and Bankia, as a result of the latter’s merger with CaixaBank. In this regard, Mata said it represents two percent of premium volume. “The departure of Bankia, although significant, is not of enormous relevance in terms of global figures. We believe that we are very well protected, because the contract covers the entire procedure for a disposal ordered by a change of control. Normally, a determination of the value of common businesses at market prices is also applied,” the Director explained. MAPFRE will invest in business development, “but it is too soon to see where we want to grow.” “Digital Business, core countries, bancassurance agreements that have been the most significant lines of inorganic growth should be the horizon for this investment. But we are still at an early stage.”
Mata also wanted to highlight the strong evolution of the asset management business, having received net contributions of more than 100 million over the period in both pension funds and plans. “It is a complementary line for retaining assets. If we cannot offer an attractive life-savings product, then we offer this kind of product,” he said, while making a very positive assessment of the situation since the agreement reached with Abante.
In turn, in a low interest rate environment, shareholders were concerned about low returns on sovereign debt. Mata explained that MAPFRE has begun, although very prudently and in line with its conservative profile, to diversify into alternative assets, mainly in real estate, infrastructure and private equity.
MAPFRE’s revenue between January and September of this year amounted to 19.05 billion euros, an 11.9 percent decrease compared to the same period of the previous year, while premiums dropped by the same proportion (down 11.9 percent) to 15.55 billion euros. At constant exchange rate and discounting the effect of PEMEX’s 2019 biennial policy in Mexico, the reduction in premium volume was 3 percent.
Profit came to 450 million euros, a 2.7 percent drop compared to the first nine months of 2019.