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MAPFRE feels bite of COVID-19 as revenue slides

MAPFRE feels bite of COVID-19 as revenue slides | Insurance Business

MAPFRE feels bite of COVID-19 as revenue slides

MAPFRE has felt the bite of the economic downturn caused by the COVID-19 crisis as its revenue dropped for the first six months of 2020.

MAPFRE’s latest data has revealed that its revenue for the first six months of 2020 totalled €13.28 billion, an 11.8% decrease compared to the same period last year. Its earnings at the end of June totalled €271 million, 27.7% lower than the result obtained between January and June of the previous year.

The decrease in revenue reflected the economic downturn caused by the COVID-19 pandemic, which impacted the country from mid-March.

“The result was strongly impacted by COVID-19 claims recorded in the reinsurance unit, the cost of which amounted to almost €87 million gross, as well as by the earthquakes in Puerto Rico (€83 million gross) and Storm Gloria in Spain (€22 million gross),” the report said.

“In the insurance units, COVID-19 is expected to have a neutral effect on MAPFRE, with a decrease in the frequency of automobile claims, compensated for mainly by direct claims in burial and health.”

The pandemic mostly impacted MAPFRE’s reinsurance business line – with a net impact of €57 million, of which €50 million came from business interruption coverage and the remainder from the credit line.

MAPFRE’s €1.55 billion reduction in premiums was driven primarily by the Pemex two-year policy issued in 2019, the €412 million reductions in life-savings premiums in Spain, and the impact of currency devaluations that resulted in a total premium reduction of €580 million.