Integrated Annual Report
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Integrated report 2016 Integrated report 2016 4 Contents 01. Letter from the chairman and CEO 6 02. MAPFRE Group 11 Deployment 14 Key financial figures 20 Other historical data 26 03. Business model and strategy 29 Business model 30 Strategy 36 Future outlook 37 04. Business performance 39 General information 40 Información by Territorial Area 43 05. Corporate Governance 55 Governance system 56 Ethics and social responsibility 61 Risk management 68 06. Main assets 75 Financial capital 77 Productive capital 83 Human capital 89 Intellectual capital 95 Social and relational capital 104 Natural capital 119 07. Basis of preparation and presentation of the report 124 INTEGRATED REPORT 2016 5 01 Letter from the chairman and CEO 6 Dear friend, At MAPFRE we are firmly committed to making The key financial figures for the year confirm our solid progress toward the highest standards of transparency position in all markets. Revenues rose to 27,092 million and corporate good governance, and we work toward euros, of which 22,813 million correspond to revenue making this possible. That is why we are taking a step from premiums. Earnings before tax were 1,805 million further in this direction this year, with the publication euros, 22 percent up on the previous year, and net of our first MAPFRE Integrated Report, which earnings were more than 775 million euros. And all of we have drafted following the guidelines of the this, as already mentioned, with excellent technical and International Integrated Reporting Council (IIRC) operational management. framework. Because we are convinced that business and sustainability cannot be dealt with separately, we And lastly, in relation to Solvency II, it is my pleasure to are offering you a unique insight into the development inform you that all the processes designed by MAPFRE of our business, its most significant elements and the in previous years have meant that this first financial imprint that our activity leaves on society which, in line year under the Solvency II European standard has with our vocation of commitment to our people and progressed completely normally and in full compliance in the countries, implies an ever more positive impact with our obligations, with our last report showing a wherever MAPFRE is present. solvency ratio of 200 percent, a comfortable level, and one of decidedly high quality given that 93 percent of 2016 was a good year for MAPFRE. Our strategy these funds correspond to TIER 1, and aligned with that based on profitable growth allowed us to enhance our applied by the large European insurers. figures, both with regard to revenue and premiums, and doing so with the rigor and discipline in underwriting that characterizes us. Furthermore, we were able to The key financial figures for significantly reduce our internal costs. All this has led us to close the financial year with an increase in net the year confirm our solid earnings of close to 10 percent and a combined ratio positions in all markets. of 97.4 percent, which is a good indicator of the quality of business, although it is still higher than the level we are aiming for. The reader will find all the company’s figures available in We experienced robust growth in Spain, and we the report, so hereinafter I will refer mainly to the more have consolidated our strengths in our main markets, qualitative aspects of the year and to our commitment including Brazil, where the current economic situation to sustainability. However, with your permission, I would is complex. The United States again produced positive like to conclude this brief statement related to the results and 2016 was a magnificent year for Central accounts by emphasizing that today MAPFRE is more America and the Dominican Republic, Peru, Uruguay, solid, more profitable and even better prepared to face Turkey and Germany. It was also an exceptional year for the challenges and commitments that we large global MAPFRE RE. insurers undertake. INTEGRATED REPORT 2016 Letter from the chairman and CEO 7 The integrated report format means that the figures In July 2016, MAPFRE approved the Group’s 2016- can be accompanied by other qualitative elements 2018 Sustainability Plan with three objectives and 15 that form an important part of the way that MAPFRE lines of action that allow us to broaden aspects relevant understands its business. In this sense, I would like to to sustainability. These include, among others, the emphasize that our most immediate return is produced Sustainable Development Agenda 2030, transparency, with regard to the 37 million clients who place their trust management of environmental, social and governance in us, because an efficient insurer always offers better factors and risks, known as ESG, both in underwriting products and services. But we are also in debt to our and in decisions regarding investment and management shareholders, and it is my pleasure to inform you that of providers, cybersecurity, climate change and diversity earnings per share have risen 8.7 percent, to reach 0.25 management. euros. The market showed its recognition of the Group’s present and future strengths, which led to MAPFRE’s MAPFRE continues to appear on the FTSE4Good shares appreciating 25.4 percent over the course of and IBEX FTSE4Good indices, which measure the 2016, against a fall of 2 percent on the IBEX 35, and a behavior of listed companies that encourage sustainable drop of 5.6 percent in the benchmark index for insurers development and respect for Human Rights. (DJ Stoxx Insurance). During 2016, MAPFRE S.A. shareholders received dividends of 400.3 million euros. The Carbon Disclosure Project has once again Lastly, our more than 37,000 employees, more than recognized the MAPFRE Group as one of the leading 84,000 agents and brokers, and the 225,000 providers global companies in acting against climate change, that MAPFRE collaborates with all over the globe are including the Group on its Global Climate A list. This also beneficiaries of the solidity and solvency of the list comprises the top 113 global companies worldwide company. in relation to emissions reduction and the fight against climate change. There is a second, broader return that we produce in society. This manifests itself firstly through our financial We are a company that is advancing, working to fulfill contributions, such as the 15,500 million euros that our commitments, that is anticipating the technological we allocated to claims payments and the 7,264 million and social changes that are transforming society. We euros that we paid over to our providers. But we have 200 ambassadors for innovation channeling also contribute through the payment of taxes in the the ideas of the rest of the organization toward our countries where we do business, a figure that rose to Innovation and Development Offices on the five almost 707 million euros in 2016, between taxes and continents. social contributions. We promote both gender and functional diversity, and Lastly, there is a third area in which MAPFRE makes a we have employees of 78 nationalities who we manage contribution: our commitment to the environment and as a global workforce; we promote equal opportunities to the legacy we want to leave for future generations. and objectivity in promotions and appointments. We invest in training and promote talent. We invested 18.4 million euros to guarantee that 99.3 percent of the workforce received training in 2016, as we continue The market showed its recognition to progress toward full compliance with the highest of the Group’s present and future standards of good governance. strengths, which led to MAPFRE’s We are an inclusive company that promotes the shares appreciating 25.4 percent integration of people living with disabilities and we over the course of 2016. 8 We are an inclusive company that I invite you to learn more about the MAPFRE reality promotes the integration of people presented in this Integrated Report. We work to develop our way of relating to the environment in a way living with disabilities and we that is increasingly transparent and which I hope can be take equally good care of both our evidenced in this publication. employees and our clients. I would like to end by expressly thanking our shareholders, our clients and in general, everyone who has placed their trust in us and supported us take equally good care of both our employees and our throughout the year. I would also like to express my clients. In 2016, more than 30,000 employees benefited gratitude to all of MAPFRE’s human resources teams from some form of work-life balance measures. Every (directors, executives, employees, delegates, agents and year 183 million euros is invested in social benefits, and collaborators), whose efforts and activities helped us to we promote social participation through the MAPFRE achieve these excellent results. Corporate Volunteering Program, which already has 5,756 volunteers worldwide. Sincerely, Lastly, MAPFRE has a strategic Energy Efficiency and Climate Change Plan to 2020 that includes the commitment to cut greenhouse gas emissions by 20 percent with respect to the Group’s carbon footprint in 2013, (which represents a decrease of 14,710,519 kWh and 9,924 tons of CO2 e). INTEGRATED REPORT 2016 Letter from the chairman and CEO 9 10 02 MAPFRE Group INTEGRATED REPORT 2016 11 MAPFRE is a global company principally engaged in The Group’s parent company is MAPFRE S.A., whose insurance and reinsurance activities in more than 45 shares are listed on the Madrid and Barcelona Stock countries across all five continents. Exchanges. MAPFRE S.A. is also a component of the IBEX 35, STOXX Europe 600 Insurance, MSCI Spain, The company’s origins can be traced to FTSE All-World Developed Europe, FTSE4Good and MAPFRE MUTUALIDAD, created in 1933 by FTSE4Good IBEX indices.