The outlook for all ratings is negative.
The ratings reflect MAPFRE Global Risks' integral role within
MAPFRE Global Risks stand-alone risk adjusted capitalisation remains weak, although it is forecast to improve in 2012 as the company increases retained earnings and also improves the credit quality of its bond portfolio. MAPFRE Global Risks has a large exposure to peripheral Eurozone sovereigns and financial institution investments representing over 200 percent of year-end capital and surplus. In recent months, the company has taken steps to reduce this exposure by investing into highly rated sovereign bonds. The company aims to protect its capital base through a comprehensive reinsurance programme placed with well rated reinsurers.
Established as MAPFRE Global Risks in 2009, the company has expanded rapidly to provide comprehensive international programme insurance to multinational companies with a network spanning 75 countries. The company targets not only large multinationals but businesses that operate in the global sectors of aviation, marine and energy. Through its 99.9 percent owned subsidiary, MAPFRE Empresas, the company insures Spanish commercial risks for companies with a turnover of less than
MAPFRE Global Risks is expected to report an excellent net income after tax of between
Positive rating actions are unlikely at this point. Negative rating actions could occur if there were a worsening of risk- adjusted capitalisation, either at a consolidated or stand-alone level, tied to investment losses or a deterioration of the operating environment in
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