July 24, 2020 / 9:40 AM / 10 days ago

Spanish insurer Mapfre's first half net profit down on COVID-19, natural disasters

FILE PHOTO: The logo of Spain's insurance company Mapfre is seen in Seville, southern Spain March 14, 2016. REUTERS/Marcelo del Pozo

MADRID (Reuters) - Spanish insurer Mapfre’s (MAP.MC) net profit fell 28% in the first half of this year as a result of the COVID-19 pandemic and natural disasters in Puerto Rico and Spain.

The company said on Friday that its net profit fell to 270.7 million euros (246.6 million pounds) in the first half down from 374.5 million euros in the same period a year ago.

The claims directly attributable to the COVID-19 pandemic on its insurance businesses were worth a cumulated 153 million euros, while the pandemic had a net cost of 57 million euros on its reinsurance business.

“The biggest impact was on the volume of business due to the lockdown measures, the lower economic activity, currency swings and an adverse environment for life insurance and savings,” Mapfre said in a statement.

The COVID-19 costs were partly offset by a lower frequency of claims on other business lines such as car and travel as people were forced to remain home during a good part of the period, the company said.

Earthquakes in Puerto Rico and the Gloria storm in Spain had a net negative impact of 77.3 million euros on Mapfre.

Given the uncertain situation, Mapfre’s management said it would monitor the situation and evaluate its dividend policy in the fourth quarter.

The Spanish insurer’s profit decline was not as bad as the second quarter loss reported by U.S. insurer Travelers Cos Inc., often seen as a bellwether for the insurance sector.

Reporting by Inti Landauro; Editing by Ingrid Melander

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