Mapfre S.A.

The stable outlook is based on our expectation that the weaker economy in Spain will weigh on the group's premium development and earnings, exacerbated by the effects of the pandemic and the global recession. That said, the group's strong diversification by country and business lines will likely diminish the negative impact, supporting its leading position in its main markets. We also expect that the group will keep its capital position comfortably at the 'A' level, according to our capital model, backed by sound earnings and supporting Mapfre's growth and dividend targets. We could downgrade the group over the next 24 months if: Capitalization declined sustainably below our threshold for the 'A' level, based on our capital model. This could result

...S&P Global Ratings expects Mapfre Group to maintain its top-tier ranking in the Spanish and selected Latin American insurance markets. Mapfre is a well-established international insurance group that benefits from a strong brand name, a multichannel distribution strategy, and diversification by business line and geography. Mapfre's implementation of its strategic plan has enhanced the underlying profitability of its underperforming lines, mainly in Brazil and the U.S., and added diversity to the group's overall earnings. We estimate that Mapfre Group's premium and earnings will decline in 2020, due to losses related to the COVID-19 pandemic and the adverse global macroeconomic environment. Negative foreign exchange movements affecting its foreign operations, combined with lower demand for life savings products, are likely to cause Mapfre's consolidated gross premiums to decline by more than 10% in 2020. Bottom-line performance could also decline, as the return on equity of 7%-9% for 2020...

Full Report