A.M. Best Assigns Ratings to MAPFRE Global Risks, Compania Internacional De
Seguros Y Reaseguros S.A.
LONDON -- December 19, 2012
A.M. Best Europe – Rating Services Limited has assigned a financial strength
rating of A(Excellent) and issuer credit rating of ”a” to MAPFRE Global Risks,
Compania Internacional De Seguros Y Reaseguros S.A. (Spain) (MAPFRE Global
Risks). The outlook for all ratings is negative.
The ratings reflect MAPFRE Global Risks’ integral role within MAPFRE S.A.
(Spain) (the group), the company’s excellent operating performance and strong
business profile within the Spanish and Latin American markets. Offsetting
these positive factors is the company’s weak risk-adjusted capitalisation and
high exposure to peripheral Eurozone sovereign and financial institutions
MAPFRE Global Risks stand-alone risk adjusted capitalisation remains weak,
although it is forecast to improve in 2012 as the company increases retained
earnings and also improves the credit quality of its bond portfolio. MAPFRE
Global Risks has a large exposure to peripheral Eurozone sovereigns and
financial institution investments representing over 200% of year-end capital
and surplus. In recent months, the company has taken steps to reduce this
exposure by investing into highly rated sovereign bonds. The company aims to
protect its capital base through a comprehensive reinsurance programme placed
with well rated reinsurers.
Established as MAPFRE Global Risks in 2009, the company has expanded rapidly
to provide comprehensive international programme insurance to multinational
companies with a network spanning 75 countries. The company targets not only
large multinationals but businesses that operate in the global sectors of
aviation, marine and energy. Through its 99.9% owned subsidiary, MAPFRE
Empresas, the company insures Spanish commercial risks for companies with a
turnover of less than EUR 600 million. Premium growth is expected to remain
strong in 2012, driven by the expansion of international business increasingly
through Europe. Premium growth will be somewhat muted for MAPFRE Empresas,
despite a portfolio transfer from MAPFRE Familiar as a result of the
challenging economic conditions in Spain and a soft market.
MAPFRE Global Risks is expected to report an excellent net income after tax of
between EUR 105 million and EUR 120 million at year end 2012, with the net
combined ratio expected to be less than 90%. The company has an excellent
five-year net combined ratio of 90%, reflecting its disciplined underwriting
and strong business profile. In 2011, the company reported a net combined
ratio of 88.1%, an improvement on the 93% reported in 2010, a result heavily
affected by the Chile earthquake. Mapfre Empresas remains an extremely
profitable part of the business with reduced economic activity in Spain
translating into reduced claims activity and therefore improving the 2011 net
combined ratio to 83.7% (2010: 86.8%).
Positive rating actions are unlikely at this point. Negative rating actions
could occur if there were a worsening of risk-adjusted capitalisation, either
at a consolidated or stand-alone level, tied to investment losses or a
deterioration of the operating environment in Spain.
The methodology used in determining these ratings is Best’s Credit Rating
Methodology, which provides a comprehensive explanation of A.M. Best’s rating
process and contains the different rating criteria employed in the rating
process. Key criteria utilised include: “Risk Management and the Rating
Process for Insurance Companies”; “Understanding Universal BCAR”;
“Understanding BCAR for Property/Casualty Insurers”; and “Rating Members of
Insurance Groups”. Best’s Credit Rating Methodology can be found at
In accordance with Regulation (EC) No. 1060/2009, the following is a link to
required disclosures: A.M. Best Europe - Rating Services Limited Supplementary
A.M. Best Europe – Rating Services Limited is a subsidiary of A.M. Best
Company. Founded in 1899, A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more information,
Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
A.M. Best Company, Inc.
Sam Dobbyn, +(44) 20 7397-0264
Senior Financial Analyst
Carlos Wong-Fupuy, +(44) 20 7397-0287
Rachelle Morrow, +(1) 908 439 2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, +(1) 908 439 2200, ext. 5644
Assistant Vice President, Public Relations
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