S&P revises MAPFRE’s outlook to positive, citing strong capital and earnings

S&P Global Ratings, a credit rating agency, has revised its outlook on the Spanish insurance group Mapfre to positive from stable, reflecting growing confidence in the group’s financial strength and earnings trajectory.

The change in outlook follows S&P’s assessment that Mapfre’s capital adequacy is expected to remain strong and may consistently exceed the agency’s 99.95% confidence threshold over the next 18 to 24 months.

This assessment is supported by Mapfre’s improving earnings profile, which S&P attributes to disciplined underwriting, pricing strategies that reflect inflationary pressures, and a well-diversified business model across geographies and lines of insurance.

In 2024, Mapfre reported net earnings of €1.6 billion, a marked increase from €1.3 billion in 2023 under IFRS 17 accounting standards, delivering a return on equity of 16.2% including minority interests.

The insurer also improved its combined ratio to 93%, compared to 96.5% the previous year. Performance in the first quarter of 2025 continued to reflect these positive developments, further reinforcing S&P’s view of Mapfre’s stable and improving financial position.

S&P highlighted the group’s strategic focus on underwriting quality across key markets—such as Spain, the United States, Brazil, and several Latin American countries—alongside contributions from its reinsurance and global risk units. These efforts, combined with targeted pricing adjustments and a commitment to operational discipline, have bolstered earnings while reducing performance volatility.

As part of this update, S&P affirmed its ‘A+’ long-term issuer credit and financial strength ratings for Mapfre Re, Compañía de Reaseguros, S.A., and maintained the ‘A-’ long-term issuer credit rating on Mapfre S.A., the group’s holding company. The ‘A-’ rating on Mapfre’s senior unsecured debt and the ‘BBB’ rating on its subordinated debt were also reaffirmed.

The positive outlook indicates that an upgrade is possible within the next 18 to 24 months if Mapfre maintains its strong capital position and continues to deliver consistent earnings performance comparable to insurers rated at the ‘AA-’ level.

On the other hand, the outlook could return to stable if capital adequacy weakens, if earnings deteriorate materially, or if the group’s ability to meet S&P’s regulatory stress test requirements declines.

S&P maintains its view of Mapfre’s business risk profile as very strong, citing the group’s competitive position, operational breadth, and resilient earnings.

While its scale and earnings diversification remain somewhat more limited than certain larger global peers, its recent performance has narrowed that difference. The group’s stable and moderate dividend policy further supports capital retention and financial flexibility.

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