[July 25, 2014]

MAPFRE Earns $51.2 Million in North America in First Half of 2014, on Premiums of $1.3 Billion

MAPFRE generated premium volume of $1.3 billion in North America in the first half of 2014, producing $51.2 million in profits. The region accounts for 8 percent of the company's global premiums, which amounted to $16.1 billion in the past six months, and 5.2% of total profits, of $628 million.

The U.S. market contributed premiums of $1.1 billion in the first half, (up 3.9 percent), driven by strong Motor and Home business performance, (up 2.6 and 9.6 percent respectively) and earnings of $43 million. Puerto Rico accounted for $202 million in premiums and $7.9 million in profits, (up 42.9 percent from last year).

2.- Global figures

MAPFRE generated premium volume of $16.1 billion in the first half of the year, similar to the figure for the same period of the previous year, and produced attributable earnings of $628 million, up 0.4 percent. Revenues stood at $18.8 billion, a figure in line with that of the preceding year. The first half was characterized by the strength of the euro against the company's key trading currencies; at constant exchange rates, premiums would have grown by 8 percent and profits by 7 percent.

Earnings before taxes and minority interests reached a new first-half high for MAPFRE, increasing by 8.7 percent to $1.29 billion, having risen by 45 percent since the onset of the financial crisis in 2007.

During the first six months of the year, business was robust, resulting in the company recording an excellent combined ratio. Moreover, equity grew by $1.1 billion in the period, to $14.6 billion, due in part to falling spreads in Spain. Likewise, unrealized capital gains recognized in equity have shown a rise of over $2.1 billion since the previous year-end.

Non-Life premiums in the first half totaled $11.8 billion, (down 0.5 percent), but the second quarter saw a year-on-year increase, (up 1.4 percent). This pick-up was particularly strong in Brazil and Mexico, cnfirming a change in trend in the Iberia Regional Area. The Life business posted premiums of $4.3 billion, (up 1.4 percent), with Brazil performing exceptionally well during the second quarter of the year.

"These results show the international business continues growing, and MAPFRE is noticing signs of economic recovery in Spain. Moreover, the excellent 95.7 percent combined ratio reflects outstanding operational management," stated Antonio Huertas, MAPFRE's Chairman and CEO.

Shareholders' equity stood at $11.6 billion, an 8.3 percent rise since year-end 2013, and total managed assets were $99 billion, an increase of 7.2 percent over the last twelve months. Managed savings were up 12 percent, to $50.6 billion.

Furthermore, the Standard & Poor's ratings agency in May raised the counterparty credit ratings of MAPFRE RE and MAPFRE GLOBAL RISKS to "A", and those of the Group's parent company to "BBB+", all of them with outlook stable. These upward revisions come on the back of those issued by this and other ratings agencies during the six first months of the year, and reaffirm the financial strength of MAPFRE and its subsidiary companies.

2.- Other Regional Areas:

The Iberia Regional Area generated premiums of $5.9 billion, which represents a 0.3 percent rise with respect to the period ended June 2013. In Spain, premiums totaled $5.7 billion, reflecting the improvement in the Motor business -which recorded premiums of $1.4 billion, in line with market performance-, the positive development of the Health line, which rose 6.9 percent, (more than double the growth level recorded by the sector), and the Multi-peril insurance line, where MAPFRE's growth is more than double that of the market. As regards Life Assurance, premiums amounted to $2 billion, 1 percent higher than the first half of 2013 (versus the 6.25 percent decline recorded by the sector). Mutual funds and managed portfolios, as well as pension funds, rose in the first half by 22.5 and 9.3 percent, respectively.

Premiums from the Brazil Regional Area grew 1.1 percent, to $3.7 billion, up 19.1 percent in local currency terms. The Motor insurance business performed very well in an exceptionally competitive market. Likewise, the company's growth in the Industrial Risks and financing-linked insurance products businesses in the second quarter of the year merits special mention.

The LATAM South Regional Area reported premium volume of $1.9 billion, which represents a 2.3 percent drop, although significant increases were recorded in the region's principal countries in local currency terms.

Premiums from the LATAM North Regional Area stood at $887 million (up 4.1 percent). Of note is the contribution from Mexico, where premiums grew 1 percent (up 9.9 percent in local currency terms), to $593 million euros, driven by the strong recovery in the Non-Life business in the second quarter, where the Motor and Industrial Risks lines made a strong contribution.

Premium volume from the EMEA Regional Area amounted to $843 million, (down 5.2 percent). In this region, the Turkish market stands out, producing $386 million in premiums, representing a 10.5 percent increase in local currency terms, in the face of fierce competition across all lines.

Premiums in the APAC Regional Area grew by 13 percent, to $63.2 million, with the Philippines contributing $23.8 million.

3.- Development of the reinsurance business:

Premiums from the reinsurance business totaled $2.6 billion, (up 1.9 percent), due in the main to new Life Assurance contracts. Net income from the business rose 14.9 percent, to $93 million, in spite of the increase in the loss ratio in the second quarter of the year.

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