Capital raise of €250m will help boost the reinsurer’s growth at a time of ’improved technical conditions’
The board of directors of Mapfre Re has agreed to raise the company’s capital by the amount of €250m to reinforce the company’s balance sheet so it will be able to offer greater reinsurance capacity.
The capital boost also offers more flexibility to structure to Mapfre to structure its own reinsurance protections, at a time when rising demand for coverage is driving rates upward.
Funding for the capital increase will be sourced internally, from surpluses resulting from Mapfre’s recent exits from bancassurance agreements.
The company hopes the move will translate into improved profitability. “We are going to have more capacity to provide coverage to our customers at a time when the presence of solvent operators with a vocation for long-term service is required, which will allow us to grow at a time of improved technical conditions in the market while maintaining our traditional prudent management of the business”, explained Eduardo Pérez de Lema, CEO of Mapfre Re.
Mapfre’s reinsurance unit is currently the second largest contributor to Group earnings, behind its Spain operation. Over the last 15 years, Mapfre Re has contributed accumulated earnings after taxes of more than €1.7 billion to its parent group.