29 Jul 2020
Posted in Insurance
MAPFRE’s left exposed by strong reliance on regions hit hardest by COVID-19
MAPFRE is set to see a spike in claims, as its business is concentrated in South America and Europe, according to GlobalData, a leading data and analytics company.
MAPFRE does have a diverse business portfolio, and importantly, it is not over-exposed in the life segment (26.74% premiums in 2019, according to GlobalData). However, it still operates in high-risk non-life segments, under current circumstances. Its Q1 2020 financial results stated that its life business declined by 14.3% due to the adverse economic environment impacting demand for savings-based products.
Deblina Mitra, Insurance Analyst at GlobalData, comments: “While it is generally better to have more premiums in non-life business at the moment, non-life remains susceptible. The stagnation of economic growth and containment measures implemented by the government after the spread of COVID-19 are expected to deteriorate the medium and long-term revenue from MAPFRE.
“Travel restrictions due to the pandemic led to a decline in motor accidents. However, an expected decline in vehicle demand is also expected to impact the growth of motor insurance business.”