MAPFRE S.A. 
Fitch Ratings has affirmed Spanish insurer
The Outlooks are Stable. A full list of rating actions is below.
Key Rating Drivers
The rating affirmation reflects MAPFRE's very strong business profile, as well as capitalisation and leverage, and strong earnings. These factors are somewhat offset by MAPFRE's significant exposure to Spanish sovereign debt, which is used to match domestic life-insurance liabilities in
Fitch ranks MAPFRE's business profile as 'Most Favourable' compared with other Spanish insurance groups. This is driven by the group's very strong market positions in
Fitch views MAPFRE as well-capitalised, based on a 'Strong' score under the agency's Prism Factor-Based Capital Model (FBM). The group's regulatory Solvency II (S2) ratio was very strong at 206% at end-2021 (end-2020: 193%). Own funds backing the S2 ratio largely consist of unrestricted Tier 1 capital. The Prism FBM score and the S2 ratio exclude MAPFRE's goodwill of
MAPFRE's financial leverage was stable at 24.2% at end-2021 (end-2020: 23.3%). We view MAPFRE's leverage as 'Strong', comparing well with similarly rated peers'.
MAPFRE's overall profitability remained strong in 2021 as reflected in a net result, excluding minorities, of
MAPFRE's underwriting performance remained resilient in 2021 and 1Q22, but deteriorated compared with prior relevant periods. MAPFRE's combined ratio increased in 2021 to 97.5% (2020: 94.8%) and 98% in 3M22, mainly due to increases in mobility that affected its motor line as well as inflationary pressures in motor and health lines, in particular in
MAPFRE's ratings take into account the group's significant exposure to Spanish sovereign debt at 125% of total equity at end-2021 (end-2020: 130%). MAPFRE is also substantially exposed to the Spanish economy, as about 60% of its attributable result originates from
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive rating action/upgrade:
Material improvement to the group's capital position, as measured by a Prism FBM score at the high end of 'Very Strong' range, and to financial performance, as measured by a net income return on shareholders' equity of 10% or more on a sustained basis
An upgrade of
Factors that could, individually or collectively, lead to negative rating action/downgrade:
Deterioration to the group's capital position, as measured by the Prism FBM score falling below 'Strong'
Downgrade of
Best/Worst Case Rating Scenario
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
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