Mapfre S A : (10.2020) Results presentation 3Q 2020

Madrid, October 30, 2020

SPANISH SECURITIES AND EXCHANGE COMMISSION

Please find attached the documentation to be presented to investors in upcoming meetings.

Ángel L. Dávila Bermejo General Counsel

9M 2020 Results

Analyst & Investor presentation

October 30th, 2020

Key highlights

Insurance units performing well >

• Lower frequency in P&C lines, mainly in Motor, offsetting COVID-19 related losses and a fall in financial results

COVID-19 P&L impacts >

• Largest impact is on the top-line due to confinement measures, lower economic activity, currency depreciation and an unfavorable environment for Life Savings products
• Direct impacts at insurance units, mainly in Burial in Spain, and Life Protection in Brazil and the rest of LATAM
• COVID-19related claims at MAPFRE RE (-€57 mn net impact)
• Travel assistance business, but with main impact in the first quarter of the year
• Savings in operating costs offset COVID-19 related expenses
• Fall in financial income in main markets as a result of yield compression, lower income from dividends and real estate, and a decrease in realized capital gains

COVID-19 balance sheet impacts >

• Extensive review of equity, fixed income and real estate portfolios, intangibles and accounts receivable
• Investments in undeveloped land valuations adapted accordingly in Q2
• Writedown of IT intangibles at MAPFRE USA in Q3 (-€14.6 mn net impact)

NatCat events >

• Various earthquakes in Puerto Rico during H1 (-€65.5 mn net impact)
• Active third quarter regarding NatCat and large man-made losses
  Strong capital position >
• Solvency ratio proven to be resilient, in a challenging environment
• Ratings recently reaffirmed by main agencies

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Key Figures > 9M 2020

						at constant
		9M 2020				exchange
						rates
	Revenue	19,051	-11.9%		-6.2%
	Total written and accepted premiums	15,550	-11.9%		-5.5%
	- Non-Life	12,439	-8.3%		-2.6%
	- Life	3,111	-23.8%		-15.1%
	Non-Life Combined Ratio - MAPFRE S.A.	95.2%	-1.1 p.p
	Non-Life Loss Ratio	66.3%	-1.6 p.p
	Non-Life Expense Ratio	28.9%	0.5 p.p
	Non-Life Combined Ratio - Insurance units	93.0%	-2.9 p.p
	Attributable result	450.4	-2.7%
	ROE (1)	6.9%	-0.4 p.p
	Balance sheet (1)
	Assets under management	61,388	-3.5%
	Shareholders' equity	8,412	-5.0%
		6M 2020
	Solvency ratio (1)	183.8%	-3.0 p.p
	(1) Variation calculated against data at December 31st, 2019
Million euros	3

Adjusted attributable result

	9M 2019	9M 2020	(mn)	(%)
Attributable result	462.9	450.4	(12.5)	-2.7%
NatCat claims	(30.0)	(65.5)	(35.5)
Direct insurance operations (1)		(25.6)	(25.6)
MAPFRE RE (2)	(30.0)	(39.9)	(9.9)
COVID-related claims (MAPFRE RE)		(57.0)	(57.0)
Goodwill writedowns (3)	(65.6)		65.6
Attributable result (adjusted for NatCat, COVID-related claims and goodwill writedowns)	558.5	572.9	14.4	2.6%
Reorganization of operations (4)	(5.8)	(15.0)	(9.2)
Financial Gains & Losses	62.8	11.5	(51.3)
Real estate (5)	0.9	(6.8)	(7.7)
Financial investments (6)	61.9	18.2	(43.7)
Attributable result (adjusted)	501.5	576.4	74.9	14.9%

1. Puerto Rican earthquakes in 2020
2. Puerto Rican earthquakes in 2020; impact from Typhoon Faxai in 2019
3. At MAPFRE ASISTENCIA in 2019 (from entities in the United Kingdom, United States & Canada)
4. Provision for restructuring (-€15 mn) in 2020; in 2019, organizational structure re-alignment(-€14.8 mn) and sale of related financial assets (€19.9 mn) at MAPFRE USA, as well as geographic reorganization at MAPFRE ASISTENCIA (-€10.9 mn)
5. Mainly sale of real estate at MAPFRE USA (€14 mn) as well as real estate provisions in Spain (-€20.5 mn) in 2020; sale of real estate in the Philippines (€0.9 mn) in 2019
6. Financial gains & losses, net of writedowns, in actively managed financial investment portfolios in the euro area (IBERIA & MAPFRE RE)

Million euros

All impacts after tax and non-controlling interests

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Key figures > by business unit

Premiums - Breakdown by business unit

								ASISTENCIA
								2.8%
												IBERIA
MAPFRE RE										30.5%
24.2%			18.4%
Reinsurance
Global Risks			5.8%
										LATAM
	INTERNATIONAL
					26.7%
	15.8%
					BRAZIL		13.6%
NORTH AMERICA			9.4%
		LATAM NORTH		6.9%
EURASIA				6.4%
			LATAM SOUTH		6.2%

Million euros

	Attributable result	Premiums	Combined ratio	ROE (2)
	9M 2020	mn	%	9M 2020	%	9M 2020	p.p.	9M 2020	p.p.
IBERIA	333.7	(15.5)	-4.4%	5,313	-10.9%	92.5%	-1.4 p.p	11.3%	-1.3 p.p
of which:
MAPFRE ESPAÑA*	207.1	(3.2)	-1.5%	4,110	0.9%	93.2%	-1.4 p.p	10.0%	-1.2 p.p
MAPFRE VIDA	126.6	(12.7)	-9.1%	1,204	-36.3%	--	--	13.2%	-1.4 p.p
LATAM	178.9	28.4	18.9%	4,667	-20.4%	89.1%	-4.3 p.p	12.9%	2.3 p.p
BRAZIL	81.1	10.7	15.2%	2,374	-23.4%	86.8%	-4.3 p.p	12.3%	2.7 p.p
LATAM NORTH	54.7	12.8	30.5%	1,205	-23.3%	90.3%	-5.6 p.p	17.0%	1.8 p.p
LATAM SOUTH	43.1	4.9	12.9%	1,088	-8.6%	93.0%	-4.5 p.p	10.5%	0.7 p.p
INTERNATIONAL	97.3	29.5	43.4%	2,767	-11.3%	98.1%	-4.1 p.p	5.8%	1.1 p.p
NORTH AMERICA	65.9	1.3	2.0%	1,644	-9.6%	97.7%	-2.0 p.p	5.7%	-0.4 p.p
EURASIA	31.4	28.2	--	1,123	-13.7%	98.9%	-8.0 p.p	6.1%	3.9 p.p
TOTAL INSURANCE	609.9	42.4	7.5%	12,747	-14.7%	93.0%	-2.9 p.p	--	--
Reinsurance	(25.7)	(131.9)	-124.2%	3,209	-2.9%	103.2%	8.0 p.p	--	--
Global Risks	5.7	9.9	238.6%	1,010	30.0%	98.1%	-13.4 p.p	--	--
ASISTENCIA	(17.5)	68.0	79.5%	494	-27.9%	98.6%	-5.7 p.p	--	--
OTHER(1)	(122.0)	(0.8)	-0.7%	(1,909)	7.4%	--	--	--	--
TOTAL	450.4	(12.5)	-2.7%	15,550	-11.9%	95.2%	-1.1 p.p	6.9%	-0.4 p.p

1. "Other" includes Corporate Areas and consolidation adjustments
2. Variation calculated against data at 12M 2019

* MAPFRE ESPAÑA includes the business in Portugal

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MAPFRE RE > Continuing to generate above market returns with lower volatility throughout the cycle

Q3 highlights

• Resilient standalone combined ratio of 95.3% in Q3, in a quarter marked by high NatCat and large claims activity, as well as some minor loss-creep from prior quarter events
• Stable valuation of Business Interruption and Credit Insurance potential COVID-19 losses
• Very strong result at global risks segment, supported by pricing improvements and very substantial underwriting measures adopted
• Very positive mid-year renewals

Combined ratio - MAPFRE RE vs. industry average (%)

110.1

						104.0				106.3
						100.6			103.2
95.2							103.2
						99.2
94.1	94.8	96.1	97.5

2016	2017	2018	2019	2020*	5 yr. ave.*
			MAPFRE - reinsurance				Industry

Source: AM Best (2016-2018). MAPFRE estimates (2019-2020).

*Latest available data for 2020: MAPFRE figures at 9M 2020, Market figures at 6M 2020

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MAPFRE RE > Resilient third quarter, despite high large and mid-sized claims frequency

Main large losses* - 9M 2020

NatCat claims	152.0
of which:
Puerto Rican earthquakes	56.7
of which: Global Risks	11.7
of which: Reinsurance	45.0
"Derecho" storms in United States (Mid-west)	28.2
Man-made losses	68.5
of which:
Explosion - Beirut	30.0
COVID-19 related losses	81.0
of which: IBNR	49.0
Business Interruption	71.0
Credit Insurance	10.0
Total large losses	301.5

* Net of reinsurance, before tax and non-controlling interests

Key highlights

• Large losses of €302 mn in 9M 2020 compared to €166 mn in 9M 2019, exceeding full year budget
• High frequency of mid-sized events during Q3
• COVID-19impact includes claims incurred, consisting of:
• • Paid and reported losses
  • IBNR reserves
• Continued uncertainty surrounding final losses, due to ongoing litigation and development of the pandemic

Million euros

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MAPFRE RE > Strong underlying profitability, with the capacity and support in place to continue operating in a positive market environment

Complete review of the reinsurance portfolio during Q2 and Q3 >

• Very strong underlying portfolio quality and diversification, with no need for restructuring
• Very good client base and market presence
• Strength of our office network, particularly in a pandemic environment
• Key competitive advantages remain unchanged

Very positive moment for global risks business >

• Restructuring successfully completed

2021 renewal outlook >

• Clear hardening trend with industry consensus about the need to improve pricing
• Strong focus on clarifying and potentially limiting cover during reinsurance renewal discussions this year

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Shareholders' equity

Change in shareholders' equity (€ mn)

Balance at 12/31 previous year	8,854
Result for the period	450
Dividends	-262
Net unrealized capital gains of AFS portfolio*	35
Currency conversion differences	-650
Other	-15
Balance at period end	8,412
*Net of shadow accounting adjustments

Currency conversion differences (€ mn)

				Sensitivity to 1
	09.30.2020		% currency	pp move in
				currency
Total	-1,890**	-650	-
of which:
US dollar	389	-101	-4.3%	23
Brazilian real	-975	-327	-31.5%	10
Turkish lira	-350	-41	-26.3%	2
Mexican peso	-159	-55	-18.3%	3

**Currency conversion differences include -€544 mn of adjustments in Venezuelan and Argentine currencies (hyperinflationary economies)

Net unrealized capital gains - AFS portfolio (€ bn)

	12.31.2019	09.30.2020
Net unrealized gains	1.0	1.0
Unrealized gains	3.6	3.7
Shadow accounting adjustments	-2.6	-2.6

AFS portfolio - IBERIA - breakdown by portfolio type (€ bn)

		Actively managed
	Immunized	Free	Conditioned	Total
Net unrealized gains	0.0	0.7	0.2	0.9
Unrealized gains	1.9	0.7	1.0	3.5
Shadow accounting	-1.9	0.0	-0.7	-2.7
adjustments
Market Value	13.7	7.0	6.4	27.1

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Capital structure & credit metrics

Capital structure (€ bn)

Leverage (1)	22.7%	24.3%
		13.1	12.7
		0.8	1.0
		1.0
		1.0
		1.1
		1.1
		10.1	9.6
		12.31.2019	09.30.2020
				Equity		Subordinated debt
				Senior debt		Bank financing

1. Total Debt / (Total Equity + Total Debt)
2. Excluding impacts of transitional measures for technical provisions and equity
3. Regulatory developments currently in progress:
4. • Risk diversification benefit for matching adjustment portfolios
   • Spanish Life business internal model for longevity risk: approved by local regulator for MAPFRE VIDA and process underway for MAPFRE Group calculations
5. Details of main rated operating entities can be found at:https://www.mapfre.com/en/issuance-ratings/

Solvency II position (€ mn)

	12.31.2019	06.30.2020
Eligible Own Funds (EOF)	8,976	8,692
Solvency Capital Requirement (SCR)	4,805	4,730
EOF-SCR	4,171	3,962
Solvency II ratio	186.8%	183.8%
Fully loaded (2)	172.3%	170.6%
Solvency II ratio - Pro-forma with regulatory developments (3)	203.9%	200.7%
Diversification benefit - matching portfolios	12.1%	11.9%
Longevity internal model	9.9%	10.2%
Combined pro-forma impacts from regulatory developments	17.1%	16.9%

Issuer and Financial Strength Ratings (FSR) (4)

	MAPFRE S.A.	FSR of
Agency	operating	Outlook	Affirmed
Issuer rating
	entities
S&P	A-	A+	Stable	10/15/2020
Fitch	A-	A+	Stable	9/21/2020
A.M. Best	-	A	Stable	10/20/2020

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Assets under management - breakdown

		Market value			Breakdown by Asset Class
	12.31.2019	09.30.2020	%	12.31.2019	09.30.2020
Government fixed income	30.1	28.9	-4.1%		56.2%	55.9%
Spain	18.2	17.9	-1.4%	34.0%	34.7%
Italy	2.9	3.0	3.0%	5.4%	5.8%
Rest of Europe	2.2	2.0	-9.2%	4.1%	3.9%
United States	1.6	1.6	0.2%	3.0%	3.1%
Brazil	3.0	2.0	-32.4%	5.6%	4.0%
Rest of LATAM	1.8	1.6	-10.2%	3.4%	3.2%
Other	0.5	0.7	47.7%	0.8%	1.3%
Corporate fixed income	9.4	9.5	1.9%		17.5%	18.5%
Real Estate*	2.4	2.4	-1.8%		4.5%	4.6%
Equity	2.8	2.5	-10.7%		5.2%	4.8%
Mutual Funds	1.8	1.4	-21.0%		3.4%	2.8%
Cash	2.5	2.7	4.9%		4.7%	5.2%
Unit-Linked	2.5	2.3	-9.0%		4.7%	4.4%
Other investments	2.0	2.0	-1.3%		3.8%	3.8%
Total Investment Portfolio	53.5	51.6	-3.6%		100.0%	100.0%
Pension Funds	5.5	5.4	-1.1%
Mutual Funds & Other	4.6	4.3	-6.2%
Total AuM	63.6	61.4	-3.5%

Billion euros

* At net book value

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Investment portfolios - additional information

Euro area - fixed income portfolios - actively managed1		Other main regions & units - fixed income portfolios

		Market value (€bn)	Accounting	Market yield	Modified
			Yield (%)	(%)	duration (%)
	12.31.2019	7.27	1.95	0.78	8.25
NON-LIFE	09.30.2020	7.40	1.70	0.42	8.21
LIFE	12.31.2019	6.82	3.53	0.33	6.89
09.30.2020	6.62	3.56	0.15	6.72

Financial gains & losses (€ mn)2

		Non-Life	Life		Total
		9M 2019	9M 2020	9M 2019	9M 2020	9M 2019	9M 2020
IBERIA	36.2	6.1	24.4	7.4	60.6	13.5
MAPFRE RE	20.0	11.2	3.7	2.0	23.6	13.2
TOTAL	56.1	17.3	28.1	9.4	84.2	26.7

		Market value (€bn)	Accounting Yield	Modified
			(%)	duration (%)
BRAZIL - MAPFRE	12.31.2019	1.99	5.25	1.24
SEGUROS	09.30.2020	1.13	3.82	2.20
LATAM NORTH	12.31.2019	0.95	6.44	2.96
09.30.2020	0.82	6.14	3.39
LATAM SOUTH	12.31.2019	1.89	7.09	7.06
09.30.2020	1.70	6.40	6.88
NORTH AMERICA	12.31.2019	2.03	2.88	5.06
09.30.2020	2.09	2.70	5.26

1. IBERIA & MAPFRE RE
2. Includes only actively managed available for sale portfolios in the Euro area, net of writedowns, before taxes and non-controlling interests

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Closing remarks

Insurance units (€610 mn net result, +7.5%) > outstanding performance with combined ratio of 93%, with lower frequency in Motor in main regions and restructuring efforts, offsetting negative COVID-19 impacts and NatCat

• IBERIA (€334 mn, -4.4%) > resilient growth in key Non-Life segments and strong underwriting profitability, helping to mitigate lower financial income and a challenging Life Savings market context
• LATAM (€179 mn, +18.9%) > outstanding performance in Brazil, Mexico, Panama and Colombia, despite currency headwinds, but top-line affected by lower business activity
• INTERNATIONAL (€97 mn, +43.4%) > improving results in USA, Turkey, and Italy

MAPFRE RE > resilient results in a difficult quarter, with a combined ratio of 95.3% in Q3, supported by financial strength, as well as a prudent underwriting approach and reserving policy

Defensive business positioning > prudent strategy in a challenging environment, focused on portfolio retention, cost contention and streamlining of business units

Bancassurance agreement with Bankia >

• Well-protectedunder terms and conditions of the contract
• Transaction closing expected for mid-2021
• Proceeds to be invested in future market opportunities to complement and underpin our profitable growth strategy

Healthy balance sheet > conservative asset valuation approach, strong capital base, financial flexibility and liquidity

Commitment to shareholders > final dividend to be approved at AGM in 2021, aligned with current dividend policy

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Investor Relations

For further information, please contact or visit:

Email:[e-mail]

Telephone: [phone]

Corporate website: www.mapfre.com

Financial documentation center:www.mapfre.com/en/financial-information/

Natalia Núñez Arana	Leandra Clark	Marta Sanchidrián	Fernando García de la Santa	Leslie Hoffman
Capital Markets and Investor	[e-mail]	[e-mail]	[e-mail]	[e-mail]
Relations Director
[e-mail]
Upcoming events*:				Follow us at:
2020
30 October	9M 2020 Results release
24-25 November	Foro Latibex
Q1 2021
11-13 January	Spain Investor Day
21 January - 10 February (TBC)	Blackout period
11 February (TBC)	12M 2020 Results release
16-18 March	Morgan Stanley European Financials Conference
* Dates are subject to change			14

Terminology

Revenue	Top line figure which includes premiums, financial income, and revenue from non-insurance entities and other revenue
Combined ratio - Non-Life	Expense ratio + Loss ratio
Expense ratio - Non-Life	(Operating expenses, net of reinsurance - other technical revenue + other technical expenses) / Net premiums earned
Loss ratio - Non-Life	(Net claims incurred + variation in other technical reserves + profit sharing and returned premiums) / Net premiums earned
Result of Non-Life business	Includes technical result, financial result and other non-technical result of the Non-Life business
Result of Life business	Includes technical result, financial result and other non-technical result of the Life business
Corporate Areas and Consolidation	Includes expenses from Corporate Areas, consolidation adjustments, as well the result attributable to MAPFRE RE and MAPFRE INTERNACIONAL's non-controlling
Adjustments	interests and other concepts
Other business activities	Includes the Group's non-insurance activities undertaken by the insurance subsidiaries, as well as by other subsidiaries, including activities of the holding companies
of MAPFRE S.A. and MAPFRE INTERNACIONAL
Solvency II ratio	Eligible Own Funds (EOF) / Solvency Capital Requirement (SCR)
ROE (Return on Equity)	(Attributable result for the last twelve months) / (Arithmetic mean of equity attributable to the controlling company at the beginning and closing of the period
(twelve months))
Other investments	Includes interest rate swaps, investments in associates, accepted reinsurance deposits and others

Alternative Performance Measures (APM) used in this report correspond to those financial measures that are not defined or detailed within the framework of the applicable financial information. Their definition and calculation can be consulted at the following link: https://www.mapfre.com/corporate/institutional-investors/financial-information/

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Disclaimer

This document is purely informative. Its content does not constitute, nor can it be interpreted as, an offer or an invitation to sell, exchange or buy, and it is not binding on the issuer in any way. The information about the plans of the Company, its development, its results and its dividends represents a simple forecast whose formulation does not represent a guarantee with respect to the future performance of the Company or the achievement of its targets or estimated results. The recipients of this information must be aware that the preparation of these forecasts is based on assumptions and estimates, which are subject to a high degree of uncertainty, and that, due to multiple factors, future results may differ materially from expected results. Among such factors, the following are worth highlighting: the development of the insurance market and the general economic situation of those countries where the Group operates; circumstances which may affect the competitiveness of insurance products and services; changes in the basis of calculation of mortality and morbidity tables which may affect the insurance activities of the Life and Health segments; frequency and severity of claims covered; effectiveness of the Groups reinsurance policies and fluctuations in the cost and availability of covers offered by third party reinsurers; changes in the legal environment; adverse legal actions; changes in monetary policy; variations in interest rates and exchange rates; fluctuations in liquidity and the value and profitability of assets which make up the investment portfolio; restrictions in the access to third party financing.

MAPFRE S.A. does not undertake to update or revise periodically the content of this document.

Certain numerical figures included in the Investor Presentation have been rounded. Therefore, discrepancies in tables between totals and the sums of the amounts listed may occur due to such rounding.

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