The organisation isn’t restrained by way of regulators’ efforts to stiffen capital necessities for the coverage industry, Huertas, 50, stated in an interview at the employer’s Madrid headquarters. Uncertainty approximately how a great deal capital insurers will want and the monetary contraction in Spain have weighed at the stock, he said.
“it's miles most effective a hassle of possibility,” he stated. “we have first-rate financing competencies with no need to growth capital,” he stated, declining to elaborate on what the company may purchase next.
Huertas, 50, is in search of to enhance Mapfre’s presence across more states within the U.S. and it plans to increase belongings in Mexico, he said. In Europe, the enterprise can add more corporations after spending 550 million euros ($685 million) on acquisitions in Germany and Italy this 12 months.
Purchases over 10 years together with in the U.S. and Turkey have reduced the insurer’s reliance on Spain and Portugal, which now account for approximately 45 percent of Mapfre’s profit. The organization in September sold Direct Line insurance group %’s Italian and German devices.
The insurance industry will likely consolidate, Huertas said, as new law will make it tougher for businesses to live to tell the tale independently. the eu Union plans to introduce Solvency II beginning in 2016. The regulations specify how a good deal capital corporations should preserve to meet future obligations and to protect clients’ money.
“In Spain there are a hundred and sixty insurance organizations and that isn't always sustainable,” stated Huertas, speaking in Spanish.
Mapfre’s solvency ratio stood at 246 percent at the quit of 2013, in keeping with statistics compiled with the aid of Bloomberg. That compares with Prudential p.c’s 280 percentage, 212 percentage for Axa SA and 182 percent at Allianz SE, the information show.
except for acquisitions, Mapfre is relying on restoration in Spain, its biggest market, and on the power of its Brazilian unit to reinforce income.
whilst the organization’s internet earnings dropped 1.6 percent within the yr through September to 673 million euros, profits from Spain rose 18 percentage within the third zone and profits from Brazil jumped sixty one percent. Mapfre employs 36,000 on five continents.
“Now Spain isn't a nightmare for Europeans,” Huertas stated.
Mapfre’s shares fell 5.2 percent this yr, lagging the nine.2 percentage advantage in the Bloomberg Europe 500 coverage Index, which tracks 32 agencies which include Mapfre. The insurer additionally lagged in the back of the 8.6 percentage advantage in the Spanish benchmark IBEX 35 Index.
The “underperformance could be defined by using investor issues concerning the profitability outlook in Spain, as better economic activity normally implies higher claims frequency and a worsening of the combined ratio,” stated Maria Paz Ojeda, analyst at JB Capital Markets SV SA.
Mapfre’s mixed ratio, or claims and prices as a percentage of premiums, became ninety five.1 percentage as of June, in comparison with a 93.6 percent at Allianz and 95.8 percentage at Axa, Bloomberg records display.
charge will increase starting subsequent 12 months should raise Mapfre’s profitability, she stated.
Low hobby rates pose a undertaking because of lower returns earned from monetary products, Huertas stated.
“This scenario makes us extra thorough with the technical control, this is returned to fundamentals, paying more interest to internal costs, controlling twist of fate costs – be greater green,” he said.