Mapfre, S.A. (MAP) Earnings Call Transcript

Good morning, and welcome to MAPFRE's activity update for the first half of 2026. This is Felipe Navarro, Deputy General Manager of the finance area. Thank you very much for joining us. First of all, I would like to apologize for releasing results earlier than expected. We have to wait for the closing of the Nasdaq. We are pleased to have with us Antonio Huertas, Group Executive Chairman, who will open the presentation with some remarks on the recently announced acquisition, as well as an overview of recent trends. He will be followed by Jose Luis Jiménez, our Group CFO, who will give us a brief overview of IFRS figures, which we will report to the CNMV on a half-year basis, and will discuss the main financials under local accounting. Jaime Tamayo, the CEO of North America, will discuss the details of Safety acquisition. I will walk you through the balance sheet and solvency data. You may submit questions at any point during the call using the Ask a Question link, and we will address them during the Q&A session at the end of the presentation. I will hand the floor over to Antonio.

Thank you, Felipe. Good morning, everyone. Thank you for joining us today. We are pleased to report that MAPFRE has delivered a solid performance with clear growth in profitability for the first half of 2026. Net profit reached EUR 624 million, reflecting excellent performance across our core markets. Iberia and MAPFRE Re were important contributors to earnings growth, while North America and Brazil also reported higher profit. This performance is supported by a diversified and resilient business model, as well as by the technical discipline reflected in our underwriting, pricing, and reserving decisions. At the same time, MAPFRE maintains a position of financial strength. We continue to benefit from strong solvency, a growing equity base, and a prudent approach to reserving. This gives us the flexibility to keep investing in the business while maintaining a conservative approach to capital and risk. In that context, I am proud to announce the acquisition of Safety Insurance, which is fully aligned with our strategic objectives. The transaction strengthens our leadership in Massachusetts and in several states in the attractive Northeast region, increasing our exposure to mature and stable markets, and supports our growth objectives in businesses that we already know well and where we have been operating for decades. Furthermore, it is expected to be accretive and cash-generating for year one, and to increase the group's net income by over 5% once fully integrated. The funding of the deal will optimize our capital structure, creating significant value for shareholders. Jaime Tamayo, our North America CEO, will provide further more details later on. With Safety reinforcing our strategic direction, I would now like to spend a few minutes on the key figures, which show that MAPFRE is on track to meet the updated targets announced at the March AGM. Premiums are up over 1%, and I would like to highlight that the currency effect is beginning to turn positive. What is more, our profitability continues to improve. The non-life combined ratio stands at an excellent 92.8%, down both year-on-year and quarter-on-quarter, and even below our updated target range of 93% to 94%. The net result is up over 9% and the adjusted ROE is well over 13%, which puts us firmly on track to achieve our target for the final year of the strategic plan. We maintain a strong solvency ratio of 206.8% as of March, above the midpoint of our target range. I will now hand over to Jose Luis, who will walk you through the details of the first half.

Thank you, Antonio. Before we move on to the local figures, I would like to briefly comment on the main IFRS KPIs, which are very aligned to local GAAP. Insurance revenue stands at almost EUR 14 billion, up around 4%. The net result amounts to EUR 646 million under IFRS, exceeding local GAAP by EUR 22 million. IFRS 17 had a positive impact of EUR 17 million, this counting offset a negative impact from the risk margin and loss component and other differences. IFRS 9 had a positive EUR 5 million impact. The positive mutual fund valuation book in P&L offset the realized gains on equity recorded under OCI. Shareholder equity is just over EUR 10 billion and the return on equity is 12.4%, consistent with local GAAP. The gross CSM is broadly unchanged, around EUR 2.6 billion and EUR 1.7 billion after tax and minorities. The 90.4% combined ratio under IFRS is below the local figure, mainly due to the discount factor, which had around a 2-point impact. Let me now turn to the main highlights of the profits and loss account, now focusing on local GAAP. Starting with non-life, premiums reach EUR 12.3 billion, up 0.3%. The non-life technical result increases to EUR 648 million, up over 9%, supported by prudent management as well as an absence of relevant events. The combined ratio improved to 92.8%. The improvement is driven by the loss ratio of 65%, down nearly one point, while the expense ratio stands at 27.8%. Non-life net financial income increased over EUR 70 million, supported by high portfolio yield and active portfolio management. Gross realized gains amount to EUR 49 million in the first half of the year, around EUR 50 million more than in 2025. Most of these gains were realized in the first quarter. The results of the non-life business reach EUR 1.1 billion, up over 10%. Turning now to the life business. Premium reached EUR 3.8 billion, growing nearly 4%. Life savings premiums are down due to a relevant corporate policy in Iberia issued in the second quarter of 2025, which is affecting the year-on-year comparison. Excluding this policy, life premiums will be growing 15.5%. Life protection continues growing, especially in Brazil, Mexico, and Iberia, with a combined ratio under 88%. Gross realized gains reach close to EUR 20 million, up EUR 6 million year-on-year. The results of the life business reach EUR 354 million, up 2%. The results from other business activities, which mainly include holding company items and financing expenses, has improved compared to the previous year. Hyperinflation adjustments are up EUR 8 million compared to last year, mainly due to a higher adjustment in Turkey. Let me now take you through the performance of the different regions and business units. Overall, Iberia delivered solid performance, driven by technical improvements and a well-diversified business model. Net result reached EUR 279 million, up 17%. Total premiums remained stable. Non-life premium growth is supported by motor and accident health. General P&C is impacted by extraordinary transport issuance in the first quarter of 2025. Life premiums were lower due to a comparison commented before. Excluding this operation, growth will be 18.8%. The combined ratio is down over 2 points to under 94%, and the return on equity is now close to 15%. In motor earnings has doubled year-on-year to EUR 74 million, while the combined ratio is down around 4 points to under 95%. Although there is a slightly higher frequency compared to the previous quarter. Premiums are up close to 2%, supported by a rise in the average premium of around 4.3%. The vehicle fleet is only slightly down year-to-date, showing clear signs of stabilization. The accident and health business is also delivering solid performance with a noteworthy combined ratio under 94%. In general P&C, premiums declined by 2%, mainly due to extraordinary issuance in the transport line in the first half of 2025. Excluding this impact, premiums will be up over 1%. Additionally, the combined ratio improved by 2 points despite the impact of the first quarter storms. Brazil continues to be an excellent contributor to profitability. The net result reached EUR 136 million, up 4%, and the return on equity stood at an excellent 25%. Premiums surpassed EUR 2.2 billion, up 4%. After several quarters of depreciation, the real is now a tailwind, up 4.8% year-on-year. Growth at cost and exchange rate is slightly down 0.7%, still impacted by the effect of high interest rates on credit link insurance, mainly agro and life protection. Other general P&C lines contribute positively to growth, and the combined ratio stands at an excellent 65.7%, supported by agro, which remain below 60%, in line with previous quarters. Regarding the life business, life protection premiums are growing over 4% in EUR, and earnings are up 9% with a combined ratio of around 85%. Other Latam is reporting solid growth with premiums up over 6% to EUR 3.1 billion, supported by the strong life and accident health volumes which offset lower issuance in property, where policies are often dollar-denominated. The combined ratio stood at 99%, up nearly 4 points, driven mainly by motor and accident health, where we are seeing higher claim costs, which will be gradually offset with tariff adjustments. In Mexico, premiums are up over 13%, with life growing 19% and accident health growing 40%. The result is just over EUR 9 million. In Peru, premiums reach EUR 454 million, up 6.6% with net results of EUR 29.6 million. In Colombia, premiums are down 2% to EUR 275 million, with a net result of EUR 7.2 million. North America continues to show solid performance and improved technical profitability with the net result up 40% to EUR 69 million. The combined ratio continues to improve with general P&C at an outstanding 80.6%. Premiums are down just under 7%, affected by the US dollar depreciation. The vehicle fleet is showing signs of a return to growth, reaching 1.2 million vehicles up 0.3% year-to-date. MAPFRE includes both reinsurance and global risks. Premiums reach EUR 4.3 billion, down 1.5%. Both businesses have been affected by the reduction in market rates, while global risk has also been impacted by currency depreciation, as around 3/4 of policies are dollar denominated. The combined ratio improved to 95.2%, down 0.7 points. There were no claims with relevant losses during the first half of the year, except for the storms in Portugal and Spain last February. Regarding the earthquake at the end of June in Venezuela, we have made a conservative estimate of an attributable loss of around EUR 25 million, based on currently available information. Reserve remain in the upper end of the confident interval, with a 2-point impact on the June combined ratio, with no additional prudence during the second quarter. The non-life financial result was up 42%, supported by solid investment yields, a higher net realized gains of EUR 26 million compared with EUR 6 million in 2025. In EMEA, growth is supported by Germany and Italy, partially offset by the 12% currency depreciation in Turkey. Results have been impacted by reserve strengthening in Italy, leading to a EUR 4.6 million loss for the region despite the strong turnaround in Germany. The non-life combined ratio is stable year-over-year, driven mainly by motor, with Germany below 100%. General P&C still reflect the impact of the floods in southern Turkey in the first quarter. In Turkey, the business remain conditioned by hyperinflation adjustments. Financial income continues to benefit from high interest rates. I will now hand the floor over to Jaime to walk us through the details of the Safety Insurance acquisition.

Thank you, Jose Luis. We have taken a strategically important step for MAPFRE. Safety Insurance is a well-established non-life insurer with a strong profitability track record and a solid presence in the independent agent channel. This strengthens our position in several states in the Northeast, achieving absolute leadership in Massachusetts, where we expect to reach approximately 25% market share in auto and 17% in homeowners. It expands our scale across both retail and commercial lines, giving us a stronger platform for growth across the region. The offer is $105 per Safety share in cash, representing a valuation of over $1.5 billion. We expect the acquisition to be accretive and generate cash as of the first year, with over $30 million of annual cost synergies expected to be delivered within 3 years, which will generate an over 5% uplift to net income for the group. The proposed financial structure is prudent and aligned with our capital framework and risk appetite. Felipe will go into the details later on. The transaction is expected to close in the first quarter of 2027, subject to the required shareholder and regulatory approvals. Safety has reported profit 44 out of its 45 years of history, with an average 97% combined ratio over the last 10 years. The business has relevant scale and is well capitalized with around $1.3 billion in premiums, total assets around $2.5 billion, and shareholders' equity of $900 million. It brings demonstrated profitability with $99 million of net income in 2025 and a return on equity of 11.5%. Additionally, the franchise has a wide distribution reach, local market knowledge, and a strong operating base to build from, with around 800 agents and nearly 600 employees. As you can see on the right, the combined U.S. franchise will be materially larger. Premiums for MAPFRE U.S.A. will reach $3.9 billion on a pro forma basis. Net income will go up from $134 million to $233 million before identified synergies and restructuring costs. In addition, total assets will reach $6.8 billion. Safety is well positioned in attractive segments, with Massachusetts representing over 90% of the book and smaller exposures in New Hampshire and Maine. The portfolio is focused on personal and small commercial lines, with private auto representing 55%, commercial auto another 15%, and homeowners 25%. On the left, you can see the pro forma market shares. As a leading non-life insurer in Massachusetts, Safety is #4 in private auto with 9% market share, #1 in commercial auto with a 12% market share, and #3 in homeowners with a 7% market share. Following the transaction, MAPFRE U.S.A. will reach a combined market share in Massachusetts of 26% in private auto, 22% in commercial auto, and 17% in homeowners, consolidating the #1 position in all 3 lines. This transaction provides a platform to tap to a larger, very profitable opportunity, the Northeast region, which is amongst the top insurance markets in the U.S. in terms of profitability, especially in property. The total market for personal and commercial lines in New England reaches $33 billion, with Massachusetts accounting for nearly half. This is a relevant and affluent region, which will underpin growth in the coming years. In New England, MAPFRE and Safety combined will hold a 13% market share in private auto, consolidating the #2 position and reaching #1 in commercial auto and homeowners with 11% and 8% market shares. We expect material value creation from already identified synergies. Integration should be manageable with low execution risk. The identified cost synergies are over $30 million run rate per year. These savings come from clearly defined initiatives, including reducing duplicities of shared services, underwriting claims and call centers, facility management, investments, advertising, and delisting, among others. The pro forma MAPFRE U.S.A. expense ratio is expected to go down by around 1 point by year 3. We anticipate around $40 million of one-off restructuring expenses as a result of the integration. There are also important capital benefits. Through the reinsurance redesign, we expect more than EUR 140 million of excess capital while providing stability to the underwriting result over the cycle. In short, this is a transaction with clear strategic and financial rationale. It deepens our presence in a mature and attractive market, strengthens our competitive position, and creates value for all stakeholders, clients, agents, employees, and shareholders. I will now hand the floor to Felipe to discuss the group's balance sheet and capital related topics, as well as the proposed funding for this transaction.

Thank you, Jaime. Before going into the details of the funding, let me discuss the solid capital position of the group. Shareholders' equity sits at EUR 9.6 billion, increasing 7% during the year. There have been positive contributions from currency conversion differences with the Brazil real and the U.S. dollar appreciating 9% and 3% respectively, as well as from the improved valuation of the investment portfolio. Leverage stands at 21%, roughly in line with December. In June, we successfully repurchased almost 60% of our March 2027 callable Tier 2 bond and issued a new 11 non-call 10 Tier 2 bond at very attractive levels and over 5.5x oversubscribed. There is still around EUR 260 million outstanding on the March 2027 callable bond, which adds around 2 points of leverage due to the early refinancing. This places us in an excellent position to tap the markets in the second half of the year. Regarding Safety, we expect it to be debt-funded with EUR 700 million in Tier 2, EUR 500 million in senior, and the remainder through bank debt. We have a bridge facility in place to provide certainty and flexibility for us to access the capital markets. With a proposed funding structure, we expect around a 10-point impact on the solvency ratio and around 7-point impact on the leverage. This is in line with our risk appetite, and we do not expect any impact on ratings. Total assets under management stand at over EUR 70 billion, growing over 8% year-to-date. Our investment portfolio amounts to EUR 46.5 billion, reaching EUR 51 billion, including unit link. Asset allocation has remained stable since the beginning of the year, and alternative investments remain a small share, under 4% of the investment portfolio. Our savings and investment business continue to grow strongly, confirming our aim to remain a benchmark in financial planning, with third-party assets reaching EUR 19 billion. Mutual funds are up 26%, driven by Brazil, with solid growth in Spain as well. I will now focus on our actively managed fixed income portfolios, which are around EUR 20 billion. The remaining EUR 15 billion is allocated to cash flow on duration matched portfolios, minimizing interest rate risk. On the Euro area, yields are stable or slightly up year-to-date, while the duration remains stable or slightly down. In our other main markets, the decrease in yield in the Brazilian portfolio to 12% is in line with the evolution of the Selic rate, given the large proportion of floating rate notes. Now that the central bank is lowering rates at a slower pace than anticipated, we have taken this opportunity to slightly increase the duration of the portfolio. In North America, there are no material changes in yield and duration. Our portfolios remain well-positioned to navigate the current volatile environment. I will now hand the floor over to Antonio to make a few closing remarks.

Thank you, Felipe. The acquisition of Safety represents exactly the kind of opportunity we have been looking for, profitable and disciplined growth in markets we know well. It strengthens our competitive position in Massachusetts and across New England, where we are already strong, and it does so through a transaction with a clear strategic and financial rationale. It also deepens our presence in a mature and attractive market. Most importantly, this deal creates value for all stakeholders, clients, agents, employees, and of course, our shareholders. Financially, the deal is accretive and capital efficient, with clear cost and capital synergies. It also accelerates innovation by combining data sets, technology, distribution, and best practices. Beyond the transaction, our first half results show strong earnings and progress across core markets. Our financial position is solid, with high capital levels and a prudent approach to our balance sheet. We are entering the second half of the year with optimism, but also with prudence given a complex and competitive environment and signs of softening in certain insurance and reinsurance segments. MAPFRE has proven it can navigate market cycles successfully and will remain focused on profitable growth. We are confident in our operations, in our people, and in our ability to continue creating sustainable value for clients, shareholders, and society as a whole. We are well-positioned as we enter the final stretch of our strategic plan, which is already proving very successful, and we firmly believe that a strengthened position in the U.S. will build on that momentum. I will now hand the floor back to Felipe for the Q&A session.

Thank you, Antonio. [Operator Instructions] Now let's start with the first set of questions. Juan Pablo from Santander asked about the cost synergies of USD 30 million, that they look low, but do you think that there can be room to do more? There's another question coming from Qian Lu from UBS, asking if we can walk them through the calculation of the 10.5x P/E multiple, and how the capital synergies are accounted for the calculation in particular. Lastly, Paz Ojeda is asking also, she would like to know the margin of improvement of the synergies that we have mentioned already.

Sure. I take it. Thank you for the questions. The synergies we are presenting in our results today are established at $30 million. They are conservative. They are pretty conservative. We expect to achieve a higher level of synergies, but we really need to go through the process of obtaining all the regulatory approvals, get in touch, and more aligned with Safety's management. We do expect those synergies, more than probably, to be higher. Additionally, we are expecting capital synergies as well. Just by looking at Safety's reinsurance structure and compare that with ours, we believe we can achieve at the very least $140 million in excess capital synergies in the Safety operation. I think, again, we do strongly believe that the synergies are conservative.

Okay. Thank you very much. We appreciate that transaction is in line with our stated M&A strategies, Yuri Shikori from Autonomous. The deal is a stage on the P&C. How we find this deal on the P&C cycle across a year? Do you think that the performance of Safety Insurance could look weak, taking into account how much we have paid on this?

Okay, I'll take the first part of the question. Thank you. It's true, the deal is totally in line with our strategy. We have said many times that U.S. is a core market, is an strategic market for MAPFRE, and we were looking for new opportunities to grow in this market. In the past, we decided to stay away from some states where we didn't have enough scale. We have maintained our strategy to grow in this market, principally in the states where we already are doing pretty well, like Massachusetts and other states in New England. The strategy is aligned with the deal. You are right that the moment of P&C could be not the moment, but it is because in the last 3 years, we haven't seen big or large claims from cat events. In terms of cat events, it's a good moment. Also after the pandemic, we have increased tariffs to adequate its level to the current situation of inflation in the P&C business. In the most of our businesses, we have good combined ratios, and even in the States, in auto and homeowners, we have the best combined ratios we have had ever. It is the right moment to do this acquisition and to try to gain scale in the States.

Yes, Antonio, just building on your comments. We would like to stress the fact that Safety has been posting profit in 44 years of the last 45 years of its performance. The last 10 years, Safety has had an average combined ratio of 97%. Having said this, the last five years, especially the 3 years after the exit of the pandemic from 2020 to 2023, have been very complex and complicated and tough years for the P&C industry in the U.S. The exit of the pandemic proved to be very complex. Inflation, the global disruption of the global supply chains, and all that created a massive inflationary burden on the rates of the insurance carriers in the U.S. Given the fact that insurers in the U.S. have to go to the regulators to get the rates approved, that exit of the pandemic was kind of, compared to other markets, like the European markets, proven to be a little bit lengthier. At this stage, last year, Safety posted a 99% combined ratio, representing that they were back into the profitability levels from a technical perspective. We do expect that profitability or technical profitability to improve in 2026 and beyond to this actual average that has been pretty sustained for the last 10 years of 97% combined ratio levels. I think just to reiterate the fact that it is a question of the actual cycle after the exit of the pandemic. We do expect Safety to go back to its historical patterns of performance.

I'm going back to one of the questions that we had before about the 10.5x multiple of the company. You have to take into account that first that we have around $1.5 billion cost of the transaction. There will be this capital release related with the reinsurance business that is going to be above EUR 140 million. We need to compare the capital needs of this company with the excess of capital that we have in this company against our present activity in the U.S., and we should calculate this around EUR 200 million. That will compare very well with around EUR 100 million that made that last year, plus the synergies that we have already mentioned. Roughly you will arrive to this calculation of 10.5x, the multiples. We have another question coming from Juan Pablo from Santander about the solvency ratio in Safety. And after, Max from JB Capital ask about final impact on solvency on MAPFRE Group, and what will be the initial impact at acquisition. If, Jaime, you can drive us through the solvency level of Safety, and I will come back for the calculation for this.

Yes. From Safety's perspective, their solvency ratio, if we were to translate it into our standards from an accounting perspective, would be around 240%. Clearly, very well-capitalized entity. We do expect roughly around $200 million in excess capital. That is not taking into consideration the potential release of EUR 140 million of capital related to the change of its reinsurance structure. We want to be cautious, and we have to go through the regulatory processes at the federal level as well as in Massachusetts. We have to receive feedback from our regulators in terms of what levels of capital we should maintain going forward.

Related to the solvency level, I will tell you that the calculation of the impact of the solvency level is as a pro forma coming from the 2025 impact. This is going to be the biggest impact that we're going to find in this transaction after MAPFRE will continue building on the solvency in the company. This is the acid test on the solvency, the one that we have published. I have a next question about the transaction. We may think that it is, or we are stating that it is within the M&A strategy. The question from Yuri Shikori is that this deal is at a stage in the P&C cycle, and historical financing situation of Safety Insurance. I think that we have already commented on this. Juan Pablo from Santander asks about the deal and capital allocation. That is more accretive than a share buyback or extraordinary dividend. This is a question of how we manage the capital of the company. It's a very interesting question.

Regarding the deal, as the president has said before, this is quite the strategy for us. We are doing a deal in a region that we know extremely well. The same kind of business that we are actively doing there. The situation of our operation in the U.S. is quite strong. Probably is the best momentum for the company since we are starting in the U.S. long time ago. We tend to believe that this deal is very good for customers, it's good for employees, and it's good for shareholders. It will provide value for the group from the first minute.

Probably this type of capital allocation probably makes more sense than a share buyback or extraordinary dividend. In terms of the share buyback, we have a free float around 30% of the total shares. Probably for us, due to our specific conditions, probably is not the best option to proceed forward. Also in terms of extraordinary dividend, we prefer to continue grow. I think this is the purpose of the company. We would like to be bigger, to continue treating our shareholders in the best way, and increase the dividend to them if the opportunity arises.

I would like to add that this is important in our strategy to think always in a long-term vision. We have to cement our presence in the U.S. where we already have an extraordinary presence in Massachusetts, and we want to increase the scale of our business there to be more competitive and to think about the results from 3 to five years in order to have a sufficient size to compete in this country. We think that it's always important to think about the short-term, but also trying to gain scale, to think about how we can grow more in the next few years. This operation, this transaction, it's focused on this strategy.

Thank you very much, Antonio. There's a question coming from Juan Pablo Santander. "Safety will remain on board?" is the question. If not, there could be a risk to replicate the business.

Thank you for the question. Safety is going to remain on board. We've proceeded since day one, since we started talking with the senior management of Safety. We proceeded in a friendly fashion. Every step of the way in this transaction has been made with the consensus of the senior management of Safety. Our expectation is that the management will continue to be on board, and not just the first year, but the second, third years of management of the company will remain with us definitely.

Thank you very much, Jaime. Paz Ojeda is asking from Banco Sabadell. She's asking about the evolution of the first quarter 2026. This company's been quite weak because of the storms, there's a revision of the rating revised or the outlook from the AM Best. What kind of confidence levels you have on the reserves run off of this company? What's your impression, Jaime?

The first quarter of 2026, in the northeast region, and specifically in Massachusetts, has been impacted by winter weather. Several storms have hit the region. This is pretty normal. The weather cycle is pretty much the same every year with more or less intensity. The difference with our performance, for example, when you look at our performance during the first quarter at MAPFRE U.S.A. level versus Safety, is our reinsurance structure. That's why I was mentioning before that we intend to change the Safety reinsurance structure in order to eliminate the volatility during the winter weather months so that we can produce more stable results. Having said this, on pre-reinsurance levels or on gross levels, we all suffer the same kind of weather impact. Regarding the reserves, we believe that Safety will continue to deliver redundancies on an annual basis.

This has been the historical pattern of Safety for the last, I would say 15 years at the very least. Our expectation is that there will be an average potential redundancy in Safety, consistent redundancy, on an annual basis between EUR 30 million to EUR 40 million per year.

Thank you very much. There are a couple of questions that I think that already been answered. The first one related with the concentration is coming from Nimrat Kaur from Bank of America. The first one is related with this question of the storms and how they're dealing with this, and I think that you already answered it. The second one is related with the release of the previous year development. I think that we can take them as answered. There's a question about the expected return on investment that we are going to have on this company. You have said that we will increase the group net income by 5% in 3 years. If the consensus is expecting EUR 1.3 billion to EUR 1.4 billion, should we expect Safety contribute by EUR 70 million?

We should definitely. EUR 70 million has been the net income produced by Safety at the closing of 2025, EUR 99 million of net income last year. This EUR 99 million was produced with a 99% combined ratio. As I said before, for the last 10 years, Safety has been posting a 97% combined ratio on average. We should expect at the very least, this level of contribution of EUR 70 million on a net basis going forward at the very least.

Thank you very much. There's a very simple one. Could there be restrictions on the coming years through a capital repatriation? Coming from Paz Ojeda, Banco Sabadell.

I don't think so. The good thing about, as you all know, about doing business in the U.S. is that it is extremely predictable. It's a very mature, serious, and predictable market. We know and we understand how to deal with our different regulatory bodies. We do not expect any restriction whatsoever in terms of capital repatriation, as long as it is done with the proper and appropriate approvals from the regulators.

Thank you very much, Jaime. A very last one. This is related as well on the footprint of the company and how the clients are, in this company, different from the ones that we have in MAPFRE. Could you qualitatively describe the key portfolio difference in terms of type of customers between you and Safety Insurance?

Yes. Essentially, the direct answer would be that there is none. The beauty of this operation and this transaction is that Safety's business is exactly pretty much the same business that we are right in. They write private auto, they write homeowners, they write commercial auto, small commercial business. That is exactly what we write in Massachusetts. We do share, out of the 800 agencies that they have appointed, pretty much 90% of those agencies also operate with us. We do know extremely well what they do. It is, as I said before, essentially the same business, the same distribution, and the same quality of customers that we would be adding into the MAPFRE U.S.A. umbrella, as soon as the transaction closes.

Thank you very much, Jaime. We are going to move to the reinsurance business. The Q2 standalone growth was 6%, despite the softening market. Please, could you unpack the drivers of growth and what margins are in this growth achieved, and also on the 94.1 combined ratio on the quarter standalone that was being achieved with a benign nat cat and no additional reserves addition. Would this imply to mid to high 90s clean run rate normalizing for cat business? This is coming from Qian Lu from UBS.

Thank you, Felipe. Regarding the reinsurance business, the property cat pricing, particularly on the GSL treaties, keeps on softening, while the structures are mainly holding. In terms of price softening, we could say around 50%, risk adjusted. It is true as well that we have more capacity being deployed in the market. We have to say that the campaign that had been run by MAPFRE has been quite successful. We continue to focus on diversified lines of business. Overall multi-line approach is preferred by clients and brokers. We have a deep key relationships, which is bearing fruits and consolidation of our position. On the other hand, the structured business is bringing meaningful additional volumes for the business. We have to say that the opening of the new office in New Delhi is contributing quite successfully. We would love to see the combined ratio on those levels. We have, as well, to point it out that we are just at the beginning of the hurricane season, and we have to be prudent.