Mapfre, S.A. (MAP.MC) Q3 2026 Earnings Call Transcript

Leandra Clark: Good morning, and welcome to Mapfre's activity update for the third quarter of 2026. This is Leandra Clark, Head of Investor Relations and Capital Markets. Thank you very much for joining us this morning. We are pleased to have with us Jose Manuel Inchausti, Vice Chairman of Mapfre, who will open the presentation with some remarks and an overview of recent business trends. He will be followed by Jose Luis Jimenez, our Group CFO, who will review the main financial highlights; and Felipe Navarro, Deputy General Manager of the Finance area, who will walk us through the balance sheet. As a reminder, we report IFRS financial information on a half year basis. The information in this activity update is prepared under the accounting policies applicable in each country, which generally do not apply IFRS 17 and 9. You may submit your 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 now hand the floor over to Jose Manuel Inchausti.

José Manuel Inchausti Perez: Thank you, Leandra. Good morning, everyone, and thank you for joining us today. We are pleased to report that Mapfre has delivered solid results for the first 9 months of the year. Net profit reached EUR 924 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 is supported by a diversified and resilient business model as well as technical discipline. Mapfre continues to benefit from a robust capital position, which was recently recognized by our main rating agencies. We have a solid balance sheet, a high-quality investment portfolio 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. We also remain strongly committed to shareholder value creation. I am happy to announce that the Board of Directors has approved an over 14% increase in the interim dividend to EUR 0.08 per share, marking the sixth consecutive increase in the last 3 years. The total paid during 2026 will reach EUR 0.19 per share, up over 15%. Our resilience in a challenging market environment is allowing us to continue to move forward with our strategic growth priorities. The acquisition of Safety Insurance, which continues to progress as planned, will further strengthen our presence in the United States and enhance our long-term growth prospect in this strategically important market. Following the completion of the antitrust review process, the remaining key milestones are the extraordinary shareholders' meeting of Safety scheduled for November 3 and the approvals from the Massachusetts regulator. I would now like to spend a few minutes on the key figures, which show that we are well positioned to meet the updated profitability targets announced at the March AGM. As we have commented during the year, the growth target is more challenging, but premiums are still up over 2% with positive tailwinds from currencies. The Non-Life combined ratio stands at 93.5% within our target range of 93% to 94%. This is an excellent level, keeping in mind that there has been higher frequency of weather-related and NatCat events during the year. The most relevant was the earthquake in Colombia in August. The net result is up close to 12%, reaching EUR 924 million, and the ROE stands at just under 13%. We maintain a strong solvency ratio of nearly 209% as of June, above the midpoint of our target range. I will now hand over to Jose Luis, who will walk you through the details of the third quarter.

José Jiménez Guajardo-Fajardo: Thank you, Jose Manuel, and good morning, everyone. Let me now turn to the main highlights of the profits and loss account, now focusing on local GAAP. Starting with Non-Life, premium reached EUR 17.5 billion, up 1%. The combined ratio remains strong at 93.5% despite the EUR 83 million net impact of the earthquake in Colombia, which affected both the local insurance entity as well as Mapfre Re, but remaining within the group's large loss budget. There have been a few other large events during the year, including the storms in Portugal and Spain in February and the Venezuelan earthquake in June. The technical result reached EUR 870 million, down 8.8%, more than compensated by financial income, which increased over EUR 210 million, supported by high portfolio yields and active portfolio management. We have been adjusting the risk profile of our portfolios due to the current market situation, especially this quarter. And gross realized gains amounted to EUR 170 million at September, over EUR 90 million more than in 2025. The Non-Life business result reached EUR 1.6 billion, up over 8.3%. Turning now to the Life business. Premiums reached EUR 5.3 billion, growing 5%. Life Savings grew despite a demanding comparison due to the issuance of significant corporate policies in Iberia in 2025. Excluding this, Life premiums are up 12.6%. Life Protection continues growing, especially in Mexico and other LatAm with a combined ratio under 88%. Gross realized gains reached close to EUR 30 million, up EUR 40 million year-on-year. The result of the Life business reached EUR 532 million, up 7%. Other business activities mainly include holding company items and financing expenses, which have increased due to early refinancing in January and June in anticipation of rising yields. Hyperinflation adjustments are up EUR 10 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 unit. Overall, Iberia delivered solid performance. The net result reached EUR 413 million, up 19%. Total premiums are up 1%. However, this comparison is distorted due to the large corporate policies issued in 2025 in Life and Non-Life. Excluding this, total premiums are up nearly 7%. Non-Life premium growth is supported by Accident & Health as well as Motor. General P&C premiums were down 2%, affected by nonrecurring transport issuance in 2025. Excluding this, premiums will be up over 2%. Life premiums are growing around 18%, excluding large corporate policies with solid trend both in Savings as well as Life Protection. The Life result was impacted by an uptick in the combined ratio, although still at very strong levels as well as one-off tax adjustment of close to EUR 11 million. The Non-Life combined ratio improved almost 2 points to around 94%, and the return on equity is now 15.6%. In Motor, earnings have doubled year-on-year to EUR 100 million, while the combined ratio is down 2.5 points to 96%. During the year, we have maintained a prudent approach to reserving as we carefully monitor inflation trends, increasing reserve during the year, especially in the third quarter. This total increase in reserve had between a 2 and a 3 points impact on the claim ratio at 9 months. Premiums are up close to 1%, supported by a 3% increase in the average premium. The vehicle fleet is down only 1.2 points year-to-date, reflecting a somewhat improved trend, thanks to selective profile-based tariff adjustments. The Accident & Health business is also delivering with a noteworthy combined ratio around 96%. In General P&C, the combined ratio improved by close to 3 points despite the several weather-related events during the year. The financial result is supported by high portfolio yields and active portfolio management. Net realized gains amount to EUR 52 million, over EUR 20 million more than in 2025. Brazil continues to be an excellent contributor to profitability. The net result reached EUR 203 million, up 2%, and the return on equity stood at an excellent 24%. Premiums surpassed EUR 3.3 billion, up 1%. The currency continued to be a tailwind, up 5.5% year-on-year at September. Growth at constant exchange rate is down 4% with high interest rates still impacting credit-linked insurance, mainly Agro and Life Protection, while other General P&C lines are contributing positively to growth. The combined ratio stands at under 76%, up 3.6 points, affected by the adverse weather seen in the South-Central region of the country during September, which affected Motor, Homeowners and Agro. General P&C remains supported by the excellent profitability of Agro with a combined ratio still below 60%, in line with previous quarters despite the storms. Regarding the Life Protection business, earnings are up 11% with a combined ratio of 84%. Other LatAm is reporting solid growth with premiums up close to 8% to EUR 4.5 billion, supported by strong Life and Accident & Health volumes. The property business continues to be affected by lower insurance rates as well as the impact of exchange rate movements as most of these policies are denominated in U.S. dollar. The combined ratio stood at 101%, up 5 points, driven by General P&C and Motor, affected by higher frequency of weather-related and cat events. The most relevant was the earthquake in Colombia in August. There were also several smaller events across the region. This is part of the normal volatility of our diversified portfolio. In Mexico, premiums are up 13% with Life growing 15% and Accident & Health growing close to 40%. The result stands at just under EUR 20 million. The combined ratio experienced an uptick of 5.8 points, pressured by the increase in claim costs due to the change of the VAT treatment for insurance companies, which will continue to be offset by tariff adjustments. In Peru, premiums reached almost EUR 700 million with a net result of EUR 42 million, both growing at nearly 9%, boosted by Life, Health and Accident. In Colombia, premiums are down 2.6% to EUR 414 million. The combined ratio rose by 20.7 points to 110.8% due to an overall increase in claims experience, especially Motor as well as the impact from the earthquake, which had a net impact of EUR 7.5 million. The losses in the country amounted to EUR 10.8 million. North America has reported a record net result of EUR 112 million, up over 12% year-on-year. This is the first time North America has exceeded the EUR 100 million mark at September. This result reflects the strength of our U.S. operation, where we had plus 24% increase in net profit. Premiums declined by 4%, partly affected by the depreciation of the U.S. dollar. In local currency, premiums were down just 0.7%. In the U.S., premiums are up around 2% in dollars, and we have gained some market share. In Puerto Rico, premiums were down, reflecting market condition and nonrenewal of some large policies. The vehicle fleet is showing signs of recovery, reaching over 1.2 million vehicles, up 0.5% year-to-date. The combined ratio continued to improve, decreasing by 0.8 percentage points to 94.9%. In Motor, the combined ratio improved by 1.3 percentage points to 96.3%, while General P&C stood at 86.9%, which is up close to 4 points, but is still at a very good level. Mapfre Re includes both Reinsurance and Global Risks. Premiums reached EUR 6.3 billion, slightly down. Both businesses continue to be affected by the reduction in market rates. The combined ratio stands at 95.3%, up 1.5 points. The estimated net impact of the earthquake in Colombia is EUR 75 million. Other relevant events during the year were the storms in Portugal and Spain last February as well as the earthquake in Venezuela in June. Reserves remained in the upper end of the confidence interval, representing a 1.5 point impact on the accumulated combined ratio. No changes has been made to this reserve during the quarter, and we will review the reserving situation in the fourth quarter after seeing the development of NatCat events and secondary perils. The Non-Life financial result was up 68%, supported by solid investment yields and higher net realized gains of EUR 50 million compared with net realized losses of EUR 4 million in 2025. In EMEA, growth is mainly supported by Malta's Life business, but the other markets are growing as well, offsetting the 12% currency depreciation in Turkey. Results and the combined ratio continue to be impacted by reserve strengthening in Italy, leading to a EUR 2.4 million loss for the region, although we are seeing a strong turnaround in Germany, where the combined ratio remains below 100%. In Turkey, the business remained conditioned by hyperinflation adjustment and a higher claims experience. Financial income continued to benefit from high interest rates in the country. I will now hand the floor over to Felipe to discuss the group's balance sheet and capital-related topics.

Felipe Navarro López de Chicheri: Thank you, Jose Luis. Before discussing funding, let me highlight the group's strong capital position. Shareholders' equity stands at EUR 9.5 billion, increasing over 5% during the year with positive contributions from retained earnings and currency conversion differences, primarily driven by the appreciation of the U.S. dollar and other Latin American currencies, especially the Brazilian real. Ahead of the closing of the Safety acquisition and subject to market conditions, we expect to issue a combination of Tier 2 capital and senior instruments. For the senior, we are targeting the short end of the curve with tenors ranging up from 3 to 5 years. For the Tier 2, we are still evaluating the potential structure and currently have a preference for an 11 non-call 10 or a 15 non-call 5 structure. Keep in mind that the final tenors and structures of both transactions will depend on the prevailing market conditions at the time of issuance, and we are carefully monitoring markets. Leverage stands slightly above 21%, still roughly in line with December. The solvency ratio stands at close to 209% as close of June 2026. Total assets under management stand at over EUR 70 billion, growing close to 10% year-to-date. Our investment portfolio amounts to close to EUR 47 billion, reaching over EUR 51 billion, including unit-linked. Regarding asset allocation, it has not materially changed. As part of our portfolio diversification strategy, we have been gradually reducing our exposure to Spanish govies and reinvesting in the rest of Europe, including Belgium and Germany. Spain, nevertheless, remains our largest exposure. Regarding the French govies, we have EUR 2 billion on our balance sheet, which is a very low share of our fixed income portfolio, around 6% in line with other European insurers. In addition, we have close to EUR 400 million related to guaranteed funds, which are sold through our mutual funds business. These investments are relatively short duration with a 50% of the bonds maturing in the next 2 years. As is the case in other developed economies, we share the view that market volatility is not a major risk and default risk appears very remote. We are also seeing value in high-quality short-dated corporates, given the resilient behavior in this volatile market environment. Alternative investments remained a small share under 4% in the investment portfolio. Moving on to the asset management businesses. They continue to deliver strong growth, reinforcing our position as a benchmark in financial planning with third-party assets reaching EUR 19.7 billion. Mutual funds are up almost 33%, largely driven by Brazil, while Spain also delivered double-digit growth. Let me now turn to our actively managed fixed income portfolios, which stand at nearly EUR 23 billion. The remaining EUR 12 billion is allocated to cash flow or duration matched portfolios, minimizing interest rate risk. In the euro area, yields are higher year-to-date, while duration is lower, reflecting reinvestments at shorter maturities. In our other main markets, in Brazil, the changes in yield and duration reflect higher allocation to Selic rate -- linked investments. In North America, the yield is slightly up and duration is down. Our portfolios remain well positioned to navigate the ongoing market volatility. I will now hand the floor over to Jose Manuel to make a few closing remarks.

José Manuel Inchausti Perez: Thank you, Felipe. Before we conclude and start the Q&A session, I would like to highlight some key messages. We have delivered another set of solid results. The diversification of our business model has allowed us to continue achieving profitable growth, supported by a strong underwriting discipline, sustained business momentum across our main markets and a robust financial result. These achievements reflect our resilience and successful execution of our strategic priorities. Our commitment to shareholder remuneration remains stronger than ever. The 14% increase of the interim dividend reinforces our track record of creating value for shareholders while maintaining a strong and sustainable capital position. We remain confident about our outlook. We are entering the final stretch of our current strategic plan, having made significant progress towards our objectives, both financial and operational. At the same time, we have been working through the year of the design of our upcoming 2027-2029 strategic plan, which we will announce next year. This plan will build on the strengths of the group and the opportunities we see ahead. We remain focused on profitable growth, combining a strong organic development with selective inorganic opportunities. In this regard, the acquisition of Safety Insurance will clearly strengthen our position in the United States and further enhance our long-term growth prospects. We are well positioned to take advantage of other new opportunities when they arise. We have a clear conviction that AI will be a transformative force for the insurance industry and the digital economy, enhancing operational efficiency and unlocking significant long-term growth opportunities. The acquisition of almost 40% stake in Tuio, which we announced this summer, is proof of our commitment to innovation and expanding our digital business. In summary, we are closing the first 9 months of the year with solid results and attractive value proposition for our shareholders and a clear road map for future growth. Before we begin with the Q&A, I would like on behalf of Mapfre to express our deepest condolences and solidarity with all those affected by the tragic train accident in Toledo. Our thoughts are with the victims, those who have been injured as well as their families and loved ones in this very difficult time. Thank you for your attention. And I will now hand the floor over to Leandra for the Q&A.

Leandra Clark: Thank you, Jose Manuel. Although most of you are already familiar with the process, as a reminder, you can use the Q&A tool on the bottom of your screen. We will organize the topic and answer them as time allows. And now let's start with the first group of questions, which is regarding the business in Brazil. We have received a few questions from -- regarding the combined ratio in Brazil for Non-Life and in particular in Motor business. Nimrat from Bank of America, Max from JB Capital and Paz Ojeda would all like to know what is behind the increase in the combined ratio on the quarter, both in Motor and General P&C.

José Jiménez Guajardo-Fajardo: Okay. So thank you very much for your questions. Regarding Motor, it is true that the combined ratio has deteriorated to about 100% with competition increasing and no material near-term improvement expected given interest rates environment. But this still is a profit-generating segment. In the case of the combined ratio, we have to say that we are seeing an increase on climate-related events in the region, especially on the South. But also, we have to see, especially on the coming quarters, how El Niño performs. So far, we will say that despite we have had some NatCat events during the region during the last quarters and especially as well in the month of October, I think the main -- the remaining quarters and months, we have to see how the El Niño evolves. So probably this is something that probably we could see more in detail on the fourth quarter or the first 2 quarters of next year. But nothing extraordinary beyond this.

Leandra Clark: Thank you, Jose Luis. I think we just had one follow-up on that question regarding the Motor business. If we've changed our strategy, are we prioritizing volume over profitability?

Felipe Navarro López de Chicheri: No, thank you very much for the question. We continue exactly with the same strategy in Brazil. There is no prioritization of the volume against profitability, and we continue dealing with the market, which is very competitive and where we are playing capital role. Thank you very much.

Leandra Clark: Thank you very much. We've also received a few questions regarding the macro outlook in Brazil, specifically, Nimrat from Bank of America is asking if the recent political and economic developments change our outlook for the business?

José Jiménez Guajardo-Fajardo: Not really. We don't make comments on the political arena, but I think Brazil is an incredible economy. We have very good profits for the region for the coming years. Probably once the election has passed and we get more stability, we see there is a lot of margin to improve. Rates at the Selic are above 30%. Once the new administration take place, probably there is room to reduce interest rates and more activity probably will help us on the insurance side. So the prospects for Brazil are quite positive.

Leandra Clark: Thank you. And Nimrat would also like to know, are we expecting any impact on our shareholders' equity from the change in bond values in the Brazilian market?

José Jiménez Guajardo-Fajardo: No, not really.

Felipe Navarro López de Chicheri: We have a very short-term duration, and it's not going to impact significantly any kind of -- any change there. Thank you.

Leandra Clark: Thank you, Jose Luis. Thank you, Felipe. Moving on to the Life business. Juan Pablo from Santander would like to know he's seen very strong performance in the quarter for Brazil, both in Life Savings and Life Protections. Could you give some additional color on these developments?

José Jiménez Guajardo-Fajardo: You mean in Brazil?

Leandra Clark: In Brazil.

José Jiménez Guajardo-Fajardo: Yes. I think the Life business is performing extremely well. And also, we have to say that all the business related to Savings, especially, I would say, on the mutual fund side is performing as well, incredibly well. Probably the rates of growth, if I'm not wrong, is around 30%. Protection, Life Protection is working well. Savings is working well. So we are confident that, that part of the business will continue performing as expected.

Leandra Clark: Thank you. I think we're going to move on now to Mapfre Re. We received a few questions regarding the cat events during the quarter. Specifically, Carlos Peixoto from Caixa BPI has asked, the earthquake impact in Mapfre Re was EUR 75 million. This means that the third quarter profit would have been EUR 176 million adjusting for this impact. Do you see this as a sustainable level? Were there any provision releases to offset the earthquake impact? And in a similar note, we received an additional question from Nimrat in Bank of America, asking for the same with regards to the combined ratio. So I think it's more or less the same question.

José Jiménez Guajardo-Fajardo: First of all, there is no provision release during the quarter. It was more the NatCat budget for the group. And it is true that so far, I mean, the NatCat events during the year has been more smooth compared to previous years. But it is true as well that this phenomenon, they call El Niño or El Gran Niño probably is starting to affect with more secondary perils. So we are seeing a low impact, but more frequency on weather-related events during the region. It is true that we have seen earthquakes in Venezuela and Colombia. It is true that in October, we have as well the earthquake in Panama. But also we have seen more raining. We have seen floods and probably we should expect as well in some part of the region as well droughts. So this is something that we have to wait and see how it evolves during the coming months. But expectation for El Niño are today high. Let's see what happens in the short term.

José Manuel Inchausti Perez: And just to -- sorry, just to remark that the Mapfre Re results must be considered in an annual basis because the NatCat events are shared along the year. We don't know which one would be affecting in which quarter. So I think it should better to see the total annual result to extract conclusions.

Leandra Clark: Thank you. I mean just 2 more follow-up questions on the Mapfre Reinsurance business. The first one comes from Qian Liu at UBS. And she would like to know how we feel about the reserve prudence that we've set aside this year. As a reminder, there was EUR 50 million in the first quarter. We didn't release this in Q2 and nor in Q3. So what should we expect looking into the rest of the year and going into 2027, considering this outlook for the Niño, as you've mentioned?

José Jiménez Guajardo-Fajardo: Well, we have to say that we prefer to be extremely prudent as always at Mapfre, we run the business. First, it is true that we are just in the middle of the hurricane season. Probably until the end of November, we have to wait and see if there is any developments on this side. Talking about NatCat events, it is true that when you have El Niño, traditionally, you have lower frequency in terms of hurricanes. But even if you only have one and it is, I don't know, 4, 5, it could be a big event. So in that side, we prefer to wait to see how the next month evolve, and we decide at the end of the year how to proceed.

Leandra Clark: Thank you, Jose Luis. And then moving on to more growth-related topics. Max at JB Capital. He's asking, well, he's observed that the premiums at Mapfre Re were growing even in the face of this softening market. What's the reason behind this growth? And what's your outlook?

José Jiménez Guajardo-Fajardo: I mean in Re, we are extremely happy with the development of the business, not just because of the lower big events that we have suffered during the year, but also in the new activities in the new lines of business that the unit has engaged during the last few years. One of the reasons of this growth is the opening of the new branch in India. So we are starting to collect the first results from that unit. But also as we have a quite close relationship with our customers, we tend to believe that even in a tough market as the one that we are dealing with, we can perform well.

Leandra Clark: Thank you, Jose Luis. And we received one final question on Mapfre Re. It just came in, it's from UBS, Qian Liu. She'd like to know if we could consider the third quarter of this year as a normal quarter and as a starting base for 2027 margin outlook.

Felipe Navarro López de Chicheri: It was -- thank you very much for the question. I think that it was a good quarter for us, for Mapfre Re. I mean only the big impact that we received from the earthquake in Colombia, that was the only significant one. We kept the level of reserves that we've been reinforcing during the year during this quarter. And I think that it could -- we could consider the third quarter as a very good quarter for the company. Thank you.

Leandra Clark: Thank you, Felipe. We have no further questions on the Reinsurance business. So we're going to move on to the Iberia business. We've received several questions regarding Motor, the Motor segment. Specifically, Youdish at Autonomous is asking more broadly, can you comment on the pricing and the competitive environment that you're seeing in the Motor business in Spain?

José Jiménez Guajardo-Fajardo: Okay. I mean in terms of, I would say, Motor profitability, I mean, the combined ratio, it is true that improved 2.5 points year-on-year, which is reflecting a more selective profile-based tariff adjustments. And also, we have less -- a more reduced loss of units. The increase on the 3Q stand-alone combined ratio mainly reflects reserve strengthening and also with the impact of CPA on claim costs. We prefer to advance the provision of this because we have had a really good quarter in terms of auto. And this means that probably for the third quarter stand-alone, this could mean around 3, 4 points. But when we move to the accumulated for the first 9 months, this could be around 2 or 3 points more combined ratio. Once again, we prefer to be prudent. What we are seeing is an increase of the CPI the numbers that we have for year-to-date for the CPI is 4.9%. But also when we go to the cost of maintenance and repairing, this has moved up 4.1% year-to-date. So based on these figures and based on the level of inflation that we are facing on the company, we prefer to be prudent for the reason we have increased reserve, and we have advanced provision for the fourth quarter. So the run rate that we say at the beginning of the year, which was a rate between 96%, 97%, this is what we expect to be by the end of the year.

Leandra Clark: Thank you, Jose Luis. So just I think we're discussing 2 to 3 points on the accumulated. And on the quarterly figure, we were discussing 3 to 4 points.

Felipe Navarro López de Chicheri: That's correct.

Leandra Clark: Thank you. We also have received several questions related to this reserving. So I think that Jose Luis has already covered all those points. Another follow-up question from Juan Pablo at Banco Santander. He would like to know when do we expect the number of insured vehicles to stabilize?

José Manuel Inchausti Perez: Well, we are focused mainly on profitability and getting good results on that and the combined ratio, the Spanish combined ratio is fantastic. It's very good. It's double than the market, 21 points. The other important idea is that we focus more on customers than in the number of policies. And in that sense, the evolution of Iberia, Mapfre Spain is positive. We are increasing in the number of customers. So we are more focused on really profitability and giving a good service than in the number of insurance policy. Anyway, the diminishing in the insured units are easing in the last months. So we have -- even on that, we have a positive outlook.

Leandra Clark: Thank you, Jose Manuel. I think we're going to move on to another business unit for now, to EMEA. The first question we've received is from Juan Pablo at Banco Santander. And he'd like to know, given the challenging competitive environment in markets such as Italy, are there any significant constraints to exiting these markets and repatriating any associated capital?

José Manuel Inchausti Perez: No. The answer -- the simple answer is we are not -- we are supporting the current operation, and we trust in the future of those markets and the role that Mapfre has to play in those markets.

Leandra Clark: Thank you. Moving on to the next block of questions is for the rest of Latin America. It's regarding the Colombia business. Qian Liu at UBS has asked, you mentioned an overall increase in claims experience. Does this mean that there is some underlying deterioration? Could you please elaborate?

José Jiménez Guajardo-Fajardo: Sure. I mean it is true that we have an increase in claims experience, and it was leading us to a deterioration of the combined ratio around 20 points. So we are taking a lot of technical measures, and it is a pity that this has happened at the same time that we had the earthquake. So this has made things a little bit closer. But once again, I mean, in Colombia, we have a lot of experience in that market. It is true that we have benefited a bit from the strong appreciation of the Colombian peso, around 40% compared to the euro year-to-date. But it is true that we have to -- maybe to close some accounts and try to work more on the technical side in order to reduce the combined ratio. This is work that we have in progress.

Leandra Clark: Thank you, Jose Luis. We received a question from CaixaBank BPI. Carlos Peixoto is asking about the General P&C business in the North America unit. The combined ratio rose from 72% in the second quarter, 72% in the third quarter and up to 98% in the third quarter 2026. What was behind this? And what should we expect going forward?

Felipe Navarro López de Chicheri: Thank you very much, Leandra. I think that in this case, we need to differentiate what is happening in the U.S. and the other country, which is Puerto Rico. I think that this increase is mainly coming from a particular situation in Puerto Rico in the third quarter. And we are continuing to understand that the performance of the U.S. market is still excellent and improving on a quarterly basis. So this is one-off situation that is related with impact in one country and not across the region.

Leandra Clark: Thank you, Felipe. We're going to move on some more group and consolidated level topics, moving away from the business units. Antoine at AlphaValue is asking about the realized gains at a group level. Could you provide a breakdown? I'll provide this breakdown after the call. And the question is if we can expect further disposals in Q4?

José Jiménez Guajardo-Fajardo: I think the reason to try to make some realized gains on the investment portfolio was overall due to the uncertainty that we are facing, I would say, this year. It is true that we had great results in most of our investment. We decided that we were living, I would say, quite interesting times where maybe it could be an election, maybe it could be a conflict, maybe it could be something. So we didn't see enough margin for improvement on the investment portfolio, especially on the equity side. So we prefer to do -- to sell some part of the equity and look for a better momentum to reinvest again. And so far, we have to say that the decision was completely right because from the day that we started to sell a part of our equity portfolio, we have seen a lateral market since those days. And probably we don't have the same clarity that we had at the beginning of the year. So it was a technical reason, trying to reduce our risk profile in our investment portfolio. And if we see that things could deteriorate even more, probably we could decide to reduce to have even a more conservative portfolio. But if not, it could be the other way around, probably we could decide to increase our risk allocation. But that was the reason to change a bit our asset allocation.

Leandra Clark: Thank you, Jose Luis. We've also received some questions regarding our future financing plans. Antoine from AlphaValue is asking regarding the safety acquisition. You previously indicated that the planned financing would be a EUR 700 million Tier 2 bond and EUR 500 million of senior and bank debt. Is this still the expected structure?

Felipe Navarro López de Chicheri: Thank you very much. We are going to be quite opportunistic. I mean the idea will be to have a mix between senior, Tier 2, and we will probably use as well part of the revolving credit facility that we have. The amounts and tenors are not decided yet. I mean, as I said during the speech, we are considering on the senior to go for a 3-year and in the Tier 2 to go for an 11 non-call 10 or more probably than a 15 non-call 5 since we will like to build a little bit the curve on the maturities. On the amounts, I mean, we need to finance those EUR 1.3 billion. So we will need to go and touch all the buckets. And we will not considering -- we are not considering for the moment to go under a benchmark volume in any of the issuances.

Leandra Clark: Thank you, Felipe. We have one other question from Juan Pablo at Santander regarding some press reports, suggesting that Mapfre was bidding for a business in Latin America, specifically Prudential, I believe. Could you elaborate on the strategic rationale for the potential acquisition? If you can comment on this and how you would consider financing a transaction like this type of transaction?

Felipe Navarro López de Chicheri: Listen, Juan Pablo, we don't comment any kind of M&A, and this is not -- we've been doing that in the past, and we are not going to comment in the future. We already said and we insisted in the last years that we were interested in increasing our position or our capital allocation in the U.S., thing that we did on the second quarter this year that we want to increase the capital allocation most of all in Iberia and other countries in Europe like Germany. And of course, if we are looking at LatAm, one country would be Brazil and the other one would be Mexico because those are the 2 main economies of the LatAm region. I'm not considering to comment anything on financing since we are not going to comment anything on this transaction.

Leandra Clark: Thank you, Felipe. Very clear. We have one final question regarding solvency and our investment portfolio from Juan Pablo. I think we'd already discussed the solvency impacts on the sovereign bonds. Our solvency sensitivities are public. But I think he was asking if we could provide even further detail on the rest of the Europe sovereign bonds by country.

José Jiménez Guajardo-Fajardo: So trying to remember a little bit the first part of the question. If you remember, even if we have a 50% rate increase in sovereign bonds, this could be around 2, 3 points on Solvency II ratio. But if we move to a next scenario, as we said or pointed out on the oil side, we have 50% increase on rates plus another 50% on spreads, it could be around 6 points. So with our solvency ratio around 208%, it shouldn't be something material. Regarding more information regard in terms of our bond allocation, we have to say that it is quite similar to most of our peers in Europe. I mean we have probably around 4%, 5% of our total sovereign portfolio in France as it happened with most of European peers. And despite France, we have as well Italy as another important allocator, Belgium and the rest, Netherlands, we have a quite a spread bond portfolio. But we don't see -- despite this present market volatility, this is something that we have seen during the last, I would say, 20 years and it is not a point of concern for us. Most of these bonds have a short maturity. So probably in less than 2 years, probably most of them will disappear. But we are confident in Europe. We are confident in France overall these days. And who knows, maybe it could be something interested to look at it maybe in a few months.

Leandra Clark: I think we have 2 remaining questions on the Iberia business. There are follow-ups. The first is a follow-up on Motor. Just specifically as what's our inflation outlook for 2027? And the second is regarding the impact of the summer wildfires in Spain in General P&C. If you want, I can answer on the impact of the wildfires. There was between EUR 10 million to EUR 13 million impact. So quite business as usual for the General P&C portfolio during the summer months of all the wildfires. And regarding the inflation outlook, I can...

José Jiménez Guajardo-Fajardo: The inflation outlook is, as we said before, I mean, so far, year-to-date is below 5%. This is something that probably in the case of Spain as rest of the European markets, the ECB will have to decide what to do with rates if we have more increases in the coming meetings or not. But probably, we tend to believe that inflation will reach some kind of peak from now on, probably could decrease a bit.

Leandra Clark: Thank you, Jose Luis. Well, I think before we finish the call today, I'd like to thank you for your time and hand the floor over to Jose Manuel for a few closing remarks.

José Manuel Inchausti Perez: Thank you very much, Leandra, and I will make a short closing remarks. The first thing is that we -- I think we bring a very good, very solid results, even taking into account the effects of the Colombia earthquakes. The other thing is that is, in my opinion, is important to say that core countries, Spain, Brazil and United States plus Mapfre Re are all of them performing very well. So that is very important for us that like the systemic units or countries of Mapfre are performing well. We are working on a specific line of business or specific channels in other countries like Mexico with health insurance and Italy with a specific distribution channel. And we are doing a more focused, broad focused in other countries as Colombia. So the technical result is quite good, but is even better the financial results that we are seeing the results of our prudence in the investments. Growth remains a challenge in a context of soft market that are affecting our main operations. And we have to be prudent, and we always choose profitability rather than volume. So our competitiveness is more based on the quality, the good quality of service that we bring in most of our countries, most of them with better figures than the average of the market and in some of them like in Spain, ranking in the top 1 of the service ranking. At the same time, our transformation efforts are on track. Our system REEF is being deployed in Latin America. IT plants from Spain, the U.S.A. and other important countries like Germany are going well. Our data platform, Atenea is being developed in 18 countries for now, and this is a very important tool for the AI deployment. We have more than 250 use cases in AI. So AI is helping us in all our processes in the -- along the company. And we are even with the first agent deployment, AI agent deployment under a common corporate and very well protected from the security point of view, IT architectures, which will be common for the group. And as a final comment, we are happy with the Safety acquisition, which is pending on some approvals, and it has been mentioned. And we are open, always open to analyze and to expand our footprint in the core markets that has been mentioned. So overall, I think we have -- we expect we have a positive outlook for the 2026 results, having this prudent in what will happen with El Niño weather events. And that is all on my part.

Leandra Clark: Thank you.

José Manuel Inchausti Perez: Thank you very much.