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Equity Story August 2018

Contents

1

2

3

4

5

Company profile

6M 2018 Results

2016-2018 Strategic Plan Objectives, initiatives and progress

Stock market performance and shareholder remuneration

Conclusions Our differentiating investment proposal

2

1

Company Profile

3

MAPFRE began its international expansion over 30 years ago

4

We are a multinational team that strives tirelessly to

improve our services and ensure the best possible

relationships with our clients, distributors, providers,

shareholders and society in general

Solvency

Integrity

Vocation for service

Innovation for leadership

Committed team

To be the most trusted global

insurance company

Vision Mission Values

5

Global player: present in 45 countries

EURASIA (EMEA & APAC) Leading positions in direct Auto insurance in Italy and Germany

Latin America Leading multinational insurance group

#1 in Non-Life

#3 overall in the market

Brazil MAPFRE RE Among top 16 reinsurance companies

North America Among the 20 most important Auto insurers in the US

Spain Benchmark company in the Spanish insurance market

#1 in Non-Life #2 overall

6

Market leader

#2 in Non-Life #4 overall in the market

Diversified business

7

- Multichannel company

- We are advancing in digital business, without ignoring traditional channels

- Global company, both geographically and in product offering

Source: MAPFRE, 2017 Integrated Report *Own and representative branches

Operations in

45 countries through 219 companies

+29.5 M clients

5,393 branches*

+84,000 distributors

36,271 employees

+139,000 providers

7

AutomobileGeneral P&CLife

ReinsuranceHealth

Diversified business

Breakdown of premiums by line

31% 26% 20% 18% 5%

Information to December 2017 8

Breakdown of premiums by business unit

15.3% 5.4% 6.0%

9.5% 7.6%

Of which:

North America Eurasia

Brazil Latam North Latam South

Information to June 2018

Of which:

IBERIA31.4%

LATAM26.7%

INTERNATIONAL17.1%

MAPFRE RE16.4%

ASISTENCIA3.6%

GLOBAL RISKS4.8%

Shareholder structure

Shareholder composition

Information to June 2018 9

68.2%

Fundación MAPFRE

Spanish institutional

Spanish non-institutional

4.2%

7.3%

International institutional

International non-institutional

20.2%

0.1%

A new organization for new challenges and goals

Information to July 2018 10

• More than 300 activities and 8,400 events in 34 countries in 2017

• 23 million people benefitting from these initiatives

Fundación MAPFRE

Social action Culture Health promotion

Accident prevention and

road safety

Insurance and social protection

• Closer, more transparent relationships

• Better corporate information and communication – both internal and with third parties

• Simplify product information and conditions

MAPFRE Stakeholders

Create trust

• Maximize MAPFRE’s social impact

• Minimize environmental risks

• Improve corporate governance practices

MAPFRE as a

company

innovative ethical

transparent dedicated

CORPORATE SOCIAL RESPONSIBILITY

Active transparency plan Sustainability Plan 2016-2018

11

2

6M 2018 Results

12

Figures at a glance

14.1 BN Consolidated

revenue

12 BN Premiums

385.7 M Attributable

result

97.4% Non-Life

combined ratio

7.8% ROE

-0.1p.p. 8.9%

ROE*

*Excluding the impacts from Hurricanes Maria, Irma and Harvey, as well as Mexican earthquakes at primary insurance units; other events and impacts at MAPFRE RE have been considered part of the recurring business

13

2018 6M Results

Figures in €

-8.7% -8.4% -7.1% +0.2 p.p

Ex-2017 NatCat vs. 12M 2017

-3.0% At constant exchange

rates

-2.3% At constant exchange

rates

Figures at a glance

Focus on profitable growth

14

2018 6M Results

Focus on profitable growth Impact of conversion

differences Financial strength

* MAPFRE Portugal data consolidated in accounts

All currencies have fallen

against the euro

SOLVENCY RATIO

203% Net earnings

w/o extraordinary items

+21%

RESTRUCTURING UNDERWAY

SPAIN* Dollar -9% Real -17% Lira -20% Mexico

Italy

Global Risks

Asistencia

Brazil

USA

250 M€

Financial income

affected by prolonged

low interest rate

environment

Net earnings

+0,2%

102 M€

MAPFRE RE NOTABLE

IMPROVEMENTS

9.3 BN

2.7 BN1.3 BN 813 M

Non-Life Life Financial Other revenue

-9.6%

-4.2%

-16.2% 1.1%

Consolidated revenue

14.1 BN -8.7%

Consolidated revenue

12 BN -8.4%

Total premiums

Figures in € 15

2018 6M Results

-3.4% +1.8%

At constant exchange rates

+1.6% w/o 2017

PEMEX policy

Total premiums

478405

-67 -231 -199

386

Non-Life Life Other concepts* Taxes Non-controllinginterests

Net earnings

-15.3%

-5.1%

-17.7% -17.9% -16.3%

-7.1%

Earnings breakdown

Million €

*Includes other activities, Holding expenses, hyperinflation adjustments 16

2018 6M Results

Premiums/profit by business area

Premiums Net profit

17

2018 6M Results

Figures in €

9.9 BN

2.2 BN631 M 471 M

Insurance RE Global Risks Asistencia

-8%

-7%

-13% -11%

LATAMIberia Internacional

4.1 BN+5%

2.2 BN-6%

3.5 BN-21%

347

102

20 -3

Insurance RE Global Risks Asistencia

-19%

--

-- 90%

83LATAMIberia International

-19%

--

-- 90%

250-28%

15-73%-4%

IBERIA

BRAZIL

LATAM NORTH

LATAM SOUTH

NORTH AMERICA

EURASIA

Regional insurance business distribution

Premiums Net profit

+5%

-15%

-41%

-11%

-7%

-4%

18

4.1 BN

2.0 BN

705 M

795 M

1.2 BN

996 M

2018 6M Results

Figures in €

EURASIA

Result

250

30

24

29

4

10

IBERIA

BRAZIL

LATAM NORTH

LATAM SOUTH

NORTH AMERICA

EURASIA

-4%

-52%

41%

-17%

-87%

-52%

LATAM NORTH w/o 2017 PEMEX policy: +1.1%

4.1 BN in premiums

Iberia

+5%

• Market share increases in the majority of business lines

• The successful implementation of the transformation process continues generating positive results

Premiums by lines Premiums by country

19

2018 6M Results

Figures in €

5.4%

1.2 BN 1.1 BN 1.1 BN

608 M

LIFE AUTO GENERAL P&C HEALTH &ACCIDENTS

-1.7%

2.7%

13.3%

5.4%

5.4%

-10.0%

-10.0%

4.1 BN

65 M

SPAIN PORTUGAL

-10.0%

4.9%

-10.0%

3.5 BN in premiums

Latin America

-21%

LATAM North

• Effect of currency depreciation in main countries

• Business restructuring in Brazil

• Solid growth in Mexico in local currency, excluding the PEMEX policy

• Significant improvement of the combined ratio in LATAM NORTH and SOUTH

20

LATAM South

2018 6M Results

Figures in €

190252

130110

Colombia

Perú

ArgentinaChile

-8.9%

0.8%

-23.4%-24.1%

406

103 64 43

México

Panamá República Dominicana Honduras

-53.9%

-11.1%-2.7% -1.4%

2.0 BN

705 M795 M

BRAZIL LATAMNORTH

LATAMSOUTH

-41.0%-11.1%

-15.3%M

M M M

M M

M M

2.2 BN in premiums

International

-6%

• Impact of the depreciation of the Turkish lira and the dollar

• US business restructuration plan successfully completed

• Growth in Italy and Germany

• Uptick in Life-Savings issuing in Malta

Premiums

21 Figures in €

2018 6M Results

North America Eurasia

-4.3%

-7.4%

-4.3%

-4.3%

-4.3%

1.2 BN

996 M

UNITEDSTATES

PUERTORICO

TURKEY ITALY GERMANY MALTA PHILIPPINES INDONESIA

-10.8%

-21.7% 0.8%1.2% 6.8%

-30.6%

13.7%

--

212 M281 M 254 M

203 M 211 M

18 M30 M

1.0 BN

Eurasia

Latam

Iberia

Norteamérica

22 Figures in €

2.2 BN in premiums

MAPFRE RE

-7%

• Exceptional performance, thanks to a well-diversified business portfolio and prudent underwriting

• Decline in premiums as a result of currency movements

• Ceded business:

• Mapfre | 38%

• Other | 62%

Premiums by region Premiums by business line

Daños

Automóviles

Vida y accidentes

Otros Ramos

Transportes

2018 6M Results

North America

Iberia

Latam

Eurasia

Other lines

Life and accidents

Auto

P&C

Transport

51.4%

15.9%

24.6%

8.1%

43.1%

25.5%

21.3%

6.4%

3.6%

49.8 49.7

10.3 9.8

60.1 59.5

12.31.2017 06.30.2018

Investment portfolio Mutual & pension funds

12.2017 06.2018

Total assets Shareholders’ equity Assets under management

Balance sheet

67.6 68.2

Billion €

23

2018 6M Results

-5.0%

-1.0%

8.6

8.5

-0.2%

12.2017 06.2018

Solvency margin breakdown (Solvency II)

Million € 24

4,433 4,433

8,875 9,003

12.31.2017 03.31.2018

Solvency Capital Requirement Eligible Own Funds

203.1% 200.2%

3

2016-2018 Strategic Plan Objectives, initiatives and progress

25

Focus on profitable growth

2016-2018 Strategic Plan

Client orientation

Digital transformation

Excellence in technical and operational

management

Culture and human talent

26

98.5% 75%

27

of projects of indicators

Our strategy made very satisfactory progress

In 2017

27 Source: 2018 AGM

28

Growth objective

Financial Creating sustainable value for shareholders

Moderated

2018 ROE

11%

Payout

50-65%

Dividend around

5%

Key Strategic Objectives 2016-2018

Source: 2018 AGM

29

PERCEIVED QUALITY MEASUREMENT

Client Orientation

MARKET SHARE

NPS 79% 2017 (80% objective for 2018)

Improvement in 50% of businesses we operate in

(75% objective for 2018)


Source: 2018 AGM

Digital Transformation

30

DIGITAL TRANSACTIONS DIGITAL BUSINESS (50% objective for 2018)

+40% +37%


Source: 2018 AGM

31

GROUP COMBINED RATIO EXPENSE RATIO PROVIDER MANAGEMENT

97.4%* (96% objective for 2018)

28.0% 72.6% (60% objective for 2018) (28% objective for 2018)

Excellence in technical and operational management

* Figures 6M 2018


Source: 2018 AGM

32

SATISFACTION INDICATOR

Culture and talent

GPTW

GENDER EQUALITY

OCCUPATIONAL AND GEOGRAPHIC

MOBILITY

INCLUSION

Women in managerial positions (40% objective for 2018)

2.2%

120 people with disabilities hired in 2017 (2% objective for 2018)

7.2%

(10% objective for 2018)

Figures 6M 2018

39.3%


Business strategy

2018

33

34

GLOBAL GDP forecast for 2018

Macroeconomic environment

+3.8%

>2% Developed

Growth risks

+4.9%

Emerging

2018 favorable Insurance

sector

Source: MAPFRE Economic Research

35

Spain GDP forecast for 2018: +2.7% 1

2

Macroeconomic environment IBERIA

Key insurance challenges: Low interest rate environment


36

Business strategy IBERIA

Profitable growth, above the market

Strengthen the MAPFRE network

FAMILY orientation

Client integrality

Savings products

Large cities

More digital resources for our network

Broker channel

Mass distribution models

1

2

37

Macroeconomic environment LATIN AMERICA

3

4

GDP forecast for 2018: +2.0%

Reactivation of growth

Brazil +1.6% | Mexico +2.4% | Argentina +1.3%

Growth in the insurance business


38

Business strategy LATAM NORTH

NEW

REGIONAL ORGANIZATION

Mexico

• Improved profitability

• Developing our own network

• Bancassurance

• Digital business

• Personal Auto insurance, Homeowners and Commercial Risk, P&C and Life Savings for SMEs

39

Central America + Dominican Republic sub-region

• Greater weight for our

own distribution network

• Bancassurance

• Digital business

• Insurance & Assistance

Business strategy LATAM NORTH

NEW

REGIONAL ORGANIZATION

40

Business strategy LATAM SOUTH Multichannel approach

Product portfolio diversification

• Bancassurance

• Alternative distribution models

• Expand own network

• Digital agent network

• Life Protection and mass market insurance products

• Credit insurance

41

Business strategy BRAZIL

We expect local currency growth in premiums and profits

• Internal costs

• Auto combined ratio

• Own distribution network

• Life and Health

Update of strategic alliance with Banco do Brasil BRAZIL

• MAPFRE will control 100% of MAPFRE BB SH2 (to be renamed MAPFRE SEGUROS), including:

› All businesses from the traditional channel and auto business from the bank channel

› Renewal rights of the Large Risks business from the bank channel

• BB MAPFRE SH1 will focus on Life, Agro, Mortgage Life, SMEs and Homeowners insurance lines for BB clients, and will maintain the Large Risks run-off portfolio

• Average growth – Total premiums: > 6%

• Combined ratio: Non-Life < 96%; Motor < 100%

• ROE: >12%

3 year targets – MAPFRE BRASIL

Overview

42

43

US GDP forecast for 2018: +3.0% 1

2

Macroeconomic environment North America

Positive outlook for the development of the insurance business


44

Business strategy North America

• New regional strategy

• Focus on more profitable states

• Digital transformation

• VERTI USA

• Serving our clients and those affected by the hurricanes

Puerto Rico:

45

Eurozone GDP forecast for 2018: +2.0% 1

2

Macroeconomic environment Eurasia

3

Turkey +4.1% | Indonesia +5.1% Philippines +6.4%

Brexit risk


46

Business strategy Eurasia

• Transition to Verti

Technological transformation and

process modernization

Germany & Italy

• Product and channel diversification

Turkey

47

Other business units

• Maintaining the focus on profitability

• New business lines

• Group reinsurance coverage management

Europe and Latam | solid position

Asia | growth

USA| selective underwriting

MAPFRE RE

48


MAPFRE GLOBAL RISKS

• Reduction of volatility

• Enhanced efficiency

• Greater client focus

• Better control of cat risks, eliminating double exposure

Corporate restructuring: Creation of an entity through which MAPFRE GLOBAL RISKS will continue analyzing and managing large risks on behalf of MAPFRE Direct business is transferred to MAPFRE ESPAÑA Reinsurance business is transferred to MAPFRE RE

49


Operational reorganization strategy

Focus on strategic markets and profitable business

MAPFRE ASISTENCIA

50

New strategic initiatives

Large cities Predictive models

SAM 3.0 MAPFRE Auto

insurance

Digital health

Digital challenge

Innovation in MAPFRE

51

Innovation offices

Accelerator

Garage

Collaborative model

Investment vehicle

MAPFRE OPEN INNOVATION

Transformation and Innovation Committee

1% of gross profit for Innovation

2

3

4

5

1

4

Stock market performance and shareholder remuneration

52

85

90

95

100

105

110

115

Base 1

00

January March February

-3.5%

-4.2%

-5.1%

April May June

Share performance

2018

To June 30, 2018

Market cap 8 BN

January- June 2018

January 2016 June 2018

Mapfre -3.5 % +11.8%

IBEX 35 -4.2 % +0.8%

DJ Stoxx Insurance -5.1 % +4.0%

Figures in €

53

Mapfre S.A Ibex 35 Stoxx Insurance

2015 2012 2016 2013 2014

MAPFRE continues creating value for shareholders

50.9

400 M 431 M 400 M 447 M

339 M

50.6 51.0 56.5 57.6

0.13 0.14 0.13 0.145 0.11

Dividends paid against results

Payout (%)

Dividend per share (€)

54

2017

0.145

447 M

63.7

Figures in €

5

Conclusions Our differentiating investment case

55

Why MAPFRE is a

differentiating value

Attractive comparison value

Rigorous technical control of the business

Strict capital and risk management

Multiline and multichannel

Geographic diversity

Management

Independent company

Human team as a key value in the organization

Responsible and committed to ESG

Culture

Shareholder stability

Predictable company

Competitive dividend policy

Value

Multichannel approach

Reinforced internal structure (local, regional, corporate)

Focus on the client

Professional information systems and equipment to achieve

excellence

Digital service and technology as allies

Greater self-governance and control

Agent challenge

Strategy

56

Who are we? The Investor Relations team

Natalia Núñez Capital Markets and Investor Relations

Director

Leandra Clark Investor Relations

Manager

Marta Sanchidrián Investor Relations

Manager

Antonio Triguero Investor Relations

Manager

Raquel Alfonso Investor Relations

Manager

57

[email protected]

This document is purely informative. Its content does not constitute, nor can it be interpreted as, an offer or an invitation to sell, exchange or buy, and it is not binding on the issuer in any way. The information about the plans of the Company, its evolution, its results and its dividends represents a simple forecast whose formulation does not represent a guarantee with respect to the future performance of the Company or the achievement of its targets or estimated results. The recipients of this information must be aware that the preparation of these forecasts is based on assumptions and estimates, which are subject to a high degree of uncertainty, and that, due to multiple factors, future results may differ materially from expected results. Among such factors, the following are worth highlighting: the development of the insurance market and the general economic situation of those countries where the Group operates; circumstances which may affect the competitiveness of insurance products and services; changes in the basis of calculation of mortality and morbidity tables which may affect the insurance activities of the Life and Health segments; frequency and severity of claims covered; effectiveness of the Groups reinsurance policies and fluctuations in the cost and availability of covers offered by third party reinsurers; changes in the legal environment; adverse legal actions; changes in monetary policy; variations in interest rates and exchange rates; fluctuations in liquidity and the value and profitability of assets which make up the investment portfolio; restrictions in the access to third party financing.

MAPFRE S.A. does not undertake to update or revise periodically the content of this document.

Certain numerical figures included in the Investor Presentation have been rounded. Therefore, discrepancies in tables between totals and the sums of the amounts listed may occur due to such rounding.

Disclaimer

presentación de powerpoint - mapfre.com · we are a multinational team that strives tirelessly to...

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