Chairman’s Statement
With the passing of the pandemic, we were hoping for a return to normality. Indeed, in my
report last year I said that we were looking to the future with some optimism that the worst
may be over, and that we may again be able to return to normality after more than two years.
However, it seems that crises seems to be the new norm. 2022 saw global supply chain
issues, the war in Ukraine and subsequent sanctions on Russia, which contributed to further
uncertainty and worldwide inflation. The reaction by Governments and Central Banks to
combat this, including the slowdown and halting of quantitative easing and increasing the
interest rates, played havoc with the markets, resulting in another year of turbulence.
Towards the beginning of the year markets fell drastically, partially recovered and fell again
towards the end of the year. Whilst equities fell, the increase in interest rates caused a
corresponding fall in bond prices. As I write this report, the markets remain depressed and it
is difficult to predict whether these large fluctuations will continue or whether the world can
return to a more stable pattern of growth.
Other geopolitical turmoil may aggravate this state of uncertainty. Tragically, the war in
Ukraine does not seem to be moving towards any sort of resolution. On the wider stage, the
United States and China seem to be moving towards political confrontation. Refugees fleeing
war zones or oppressive governments or even the effects of climate change, contribute to this
instability as Europe struggles to have a coherent, yet humanitarian approach to this issue.
The local market was to an extent shielded from this and therefore the results of MAPFRE
Middlesea p.l.c. (“MAPFRE Middlesea”, “MMS” or “Company”), which deals in general
insurance, reflected this with profitability largely on track. On the other hand, MAPFRE
MSV Life p.l.c. (“MAPFRE MSV Life”), the life company which has a substantial
investment fund, was greatly affected by the performance of the markets which, even if this
has not significantly affected profitability, has impacted the performance of the fund as well
as putting pressure on solvency.
All in all, a complex situation which I shall endeavour to explain further.
Results
The consolidated results show a profit before tax and minority interests of €22.2 million.
MAPFRE Middlesea made a profit of €6.0 million (compared to €4.1 million in 2021) whilst
MAPFRE MSV Life made a profit of €17.2 million (compared to a profit of €16.7 million in
2021). This is before tax and minority interests. The seeming excellent results belie the
complex effects brought about by the markets, principally on the life company.