Mapfre, S.A. ($MAP)

Good morning, and welcome to MAPFRE's activity update for the first quarter of 2026. This is Leandra Clark, Head of Investor Relations and Capital Markets. Thank you very much for joining us. We are pleased to have with us Jose Manuel Inchausti, Vice President 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, will walk you through the balance sheet as well as the 2025 embedded value figures, which were also released this morning on our website. Before we go into the details, I would like to mention that we have adapted the format of this presentation to reflect your feedback on disclosure. We are aware that many analysts are modeling our business on a regional rather than segment approach, and we have adapted the presentation accordingly. We hope this updated format better meets your needs. And as always, we are open to any further feedback. As a reminder, MAPFRE reports its IFRS financial information on a half year basis. The information included in this activity update has been prepared under the accounting policies applicable in each country, which generally do not apply IFRS 17 and 9. Finally, as a reminder, you can 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. And with that, I will now hand the floor over to Jose Manuel Inchausti.

Thank you, Leandra. Good morning, everyone, and thank you for joining us today. Let me begin by highlighting the strength of MAPFRE results this quarter with a net profit of EUR 311 million, an excellent performance in most of our core markets. This once again demonstrates the capacity of our business model to deliver solid results even in a complex and demanding market. From a macroeconomic perspective, the current global environment is one of moderate growth with an orderly slowdown in developed economies and greater resilience in many emerging markets. After a period of gradually normalize inflation, this trend has reversed in recent weeks. And as you are aware, geopolitical uncertainty remains very high. In addition to this challenging macro and geopolitical backdrop, we are now from increased competition and pricing pressure in so march. Our highly diversified business model, both geographically and by business lines allow us to continue growing in a balanced and sustainable manner. This diversification is once again proving to be a key strength, especially in times of uncertainty. A good example of this is in America, a strategic region where MAPFRE is the leading multinational insurance group. We believe the region is less exposed to the direct economic consequences of the current geopolitical context. And during the quarter, LatAm as a whole continued to perform positively, providing stability to results. Another relevant factor this quarter has been the evolution of currencies. After several years with a very negative impact, this headwind is starting to moderate. The U.S. dollar is recovering this year, and this should feed through into our accounts in the coming quarter. From a technical perspective, results were clearly supported by the motor business, which continues to consolidate improvements achieved in recent quarters affected in the non-life combined ratio. I would also like to highlight the excellent performance of MAPFRE RE. Profit grew once again during the quarter, supported by the absence of significant catastrophic events while continue to provide stability and diversification to the group, underpinned by prudent management and strength reserves. Now I would like to spend a few minutes on the key figures. We show that MAPFRE is on track to meet the updated targets announced at the AGM in March. Premiums are still seeing an impact from currencies, but to a lesser extent than prior years. Growth is relatively flat at constant exchange rates, confirming that the underlying business is strong and that we will be able to return to growth. As a reminder, the growth target is a 3-year average of premium growth of 6%, excluding [indiscernible] savings at constant exchange rates. What's more, our profitability continues improving. The Non-life combined ratio stands at an excellent 93.2%, down nearly [indiscernible] and at the lower end of the updated target range, 93% to 94%. Performance is consistent with our focus on profitable growth. The net result of EUR 311 million is nearly 15% higher than the previous year with ROE reaching 12.9%, 13.8%, excluding extraordinaries, which put us well on track to achieve our 13% ROE target for the last year of the strategic plan. Our solid balance sheet and stable financial position are evident in our solvency ratio, 205% at December above the midpoint of our target range. I will now hand the floor over to Jose Luis to walk us through the details of the quarter.

Let me walk you through the main highlights of the profit and loss account. Starting with Non-Life premiums continue to be affected by currency movements, particularly the U.S. dollar. Beyond North America, this has also had a relevant impact on MAPFRE RE and on some Latin American businesses, where property portfolios are often dollar-denominated. In euros, Non-Life premiums are down 2.6%, reaching over EUR 6.6 billion, while at constant exchange rates, they are broadly flat. The Non-Life technical result increased by 16.6%, supported by prudent technical management and the absence of large catastrophic events. The loan ratio is down 1.7 points, driven by better selection and effective claims management, which more than offset the slight uptick in the spend ratio. Non-Life net financial income increased by around EUR 30 million, supported by high portfolio yields and an increase in realized gains as we reduced the risk exposure of our portfolios at the beginning of the year. Gross realized gains amounted to EUR 38 million this quarter, almost EUR 19 million more than last year. Turning now to the Life business. Premiums were broadly stable at EUR 1.8 billion, down 0.6% in euros. Life [indiscernible] continues to show solid growth, especially Iberia and Latin America with a combined ratio below 86%. Gross realized gains were up around EUR 4 million year-on-year. Regarding all the business activities, which mainly include holding company items, results were affected by a EUR 5 million increase in debt expenses, as well as side and some timing difference in other holdings company. The high interest rate -- the higher interest expenses is following the early financing of EUR 1 billion in January to replace the [indiscernible] maturing in May [indiscernible] inflation adjustments were relatively stable year-on-year at EUR 6 million. We continue to deliver strong and growth driven by improved underwriting performance, disciplined cost and risk control and native investment portfolio management. Now I will spend some time walking through the different regions and business units. Overall, Iberia delivered solid performance during the quarter, driven by technical improvements and a well-diversified business model. Net profit reached almost EUR 138 million, up 14%. Total premiums remain stable year-on-year. Life premiums are down while Non-Life premium growth is supported by motor and accident and health. The combined ratio improved by 1.5 points reaching around 94% and the return on equity is now close to 14%. Motor continues to improve, and earnings have more than doubled year-on-year to EUR 46 million while the combined ratio has improved almost 6 points to 92.5%, premiums are up over 2%, supported by a rise in the average premium of around 6%. And slightly above the 5% market increase. The [indiscernible] is only slightly down year-to-date, showing clear signs of stabilization. And [indiscernible], we are increasing the number of clients particularly in health and homeowners. We have also achieved a new milestone, reaching 200,000 clients through our agreement with Banco Santander. The Accident & Health business is also delivering solid performance with an outweighted combined ratio of 88.7%, an improvement of 1.7 points. This reflects not only favorable claims experienced during the quarter but also the benefit of portfolio pruning. In General P&C, premiums declined by 3.9%, and mainly due to extraordinary influence in the transport line in the first quarter of 2025. The combined ratio increased by just over 4 points to 11%. And reflecting the impact of the storms affecting homeowners and condominiums, which were not covered by the consortium in many cases. We expect the impact of the combined ratio to taper off in the coming quarters. Turning to the Life business. Premiums were down 5%, reflecting lower activity in savings compared to last year due to the timing of product maturities. Life Protection is growing nearly 6% with an excellent combined ratio of 65%. Regarding financial income, realized gains are in line with the previous but with higher contribution from life compared to non-life. Brazil remains a key driver of profitability. Net profit reached EUR 65 million, up nearly 6% and the return on equity remains well over 26%, with improved technical ratios and strong investment returns. The Non-Life combined ratio is outstanding at 75%. In euros, premiums are down 0.2% as growth is conditioned by the high interest rates, which are affecting CreditLink insurance products, mainly agro and [indiscernible]. The currency is now a tailwind. Other general P&C lines, both in retail and industrial clients are contributing positively to growth. The combined ratio was stable at 68%, supported by [indiscernible], which remains below 60%, pretty much in line with previous quarters. The auto combined ratio has also improved slightly. Regarding the Life business, premiums are down 3% and earnings remain sable year-on-year. with a protection combined ratio of 84%. In LatAM, premiums growing 4% driven by life as well as accidental health, which offset lower in swing in the property line which has many dollar-denominated policies. The Mexican and the Colombian peso appreciation also contributed positively, up 5% and 1%, respectively. The combined ratio stand at 96.7%, up 1.5 points, driven by motor and accident health. The Life business is growing with the strong contributions from Mexico, Peru and Colombia with a [ EUR 60 million ] net result. In Mexico, premiums are over 16% with Life growing 19%. Accident and Health is up 38%, supported by BAT and related tariff rises. The combined ratio is 96.4% with a net result close to EUR 12 million. In Peru, premiums are down 1.7% due to currency depreciation, while the net result has improved 24% to EUR 50 million. In Colombia, premiums are up over 4% while the combined ratio is up 5 points, but remains at an excellent level of 89.9%. North America continues to show solid performance and improved technical profitability. Premiums are down just over 10% in euros, mainly due to the U.S. dollar depreciation. The [indiscernible] fleet is stabilizing with policy growth is moving faster than expected. The combined ratio continues to improve, down 2.4 points to 95% with General P&C at an outstanding 189 despite winter weather impacts. Results are up to EUR 30 million. [indiscernible] includes reinsurance and global risk, and both are affected by market softening as well as the U.S. dollar. Global risk premiums are down 13%, affected by large policy issue last year. And reinsurance is down 6%, 4.5% at constant exchange rates. The combined ratio improved 26.8% in the absence of significant claims in the first quarter with the exception of the storms in Southern Europe. Additionally, there was a 5-point impact from the survey prudence remaining in the upper end of our confidence interval. The Global Risk business also improved its combined ratio to around 89%. The non-life financial result is up EUR 36 million, supported by solid investment yields and the realization of EUR 32 million in gross gains, EUR 26 million more than last year. EMEA is reporting its fourth consecutive quarter of reaching EUR 2 million, with a strong turnaround in Germany, now in positive territory. The Non-Life combined ratio is down 2 points, driven mainly by motor, while General P&C was affected by the fluids in Southern Turkey. Furthermore, in Turkey, the business remained conditioned by hyperinflation adjustments, although in line with the previous years as well as 20% leader depreciation Financial income continues to benefit from high interest rates. Finally, [indiscernible] is contributing positively to the group, with operating revenue growth in we are also seeing a continued improvement in profitability. I will now hand the floor over to Felipe to walk us through the balance sheet and capital related topics.

Thank you, Jose Luis. Shareholders' equity remains robust at EUR 8.9 billion, in line with year-end. Positive currency conversion differences mainly from the Brazilian real and the U.S. dollar appreciating 7% and 2%, respectively, offset the impact of markets on the performance of the investment portfolio. Leverage stands at 26%, up almost 6 points. Following a prudent approach in January, we completed a successful [indiscernible] senior transaction, very attractive levels, given the current market conditions. These bonds will replace the senior bond maturing in May. Exiting this leverage would be at 21.5%. On the top right, we have included the 2025 embedded value figures which reflect the use of the CSM net of tax under IFRS for the multiyear business. Embedded value is flat at just over EUR 7 billion. The value of in-force business is down due to a lower contribution from detection products in Brazil and Iberia, which was offset by the multiyear business in Iberia, LATAM and EMEA. The return on embedded value was almost 10% with a positive contribution from the Spanish savings business, driven by higher premium volumes and margins. The value added from new business is also up with new business margin increasing 30 basis points to 3.6%. The Solvency II ratio continues within the target range over 205% at the [indiscernible] 2025, according to provisional data. Final data will be disclosed with a group SFCR in May 20, 2026. Total assets under management stand at over EUR 67 billion, growing 4% year-to-date. Our investment portfolio amounts to EUR 46 billion, reaching EUR 50 million if we include unit-linked. On the right, we are now presenting the investment portfolio, wages, including unit linked to better reflect our risk profile. At the beginning of the year, we decided to slightly reduce equity given the high degree of market uncertainty. This was mainly reinvested in European govies including France and to a lesser extent, Belgium and Germany as well as some high-quality credit. We would like to highlight that alternative investments are a small share of our portfolio, around EUR 1.8 billion invested. More than half is invested in prime European real estate around EUR 900 million. Less than 30% is allocated to corporate private debt via funds of funds, mainly in Europe, focused on senior loans with a defensive position in terms of diversification and duration. Infrastructure and renewable energy are 13% of alternatives, while private equity amounts to 8%. Regarding third-party assets, they are up 6% to over EUR 17 billion. We are the top nonbank asset manager in Spain and remain a benchmark in financial planning. Mutual funds are growing 12% this year. Brazil continues to be the main contributor to this growth. with an increase in assets under management of over 30% during the quarter. We are also seeing solid growth in Spain. I will now comment on our relevant fixed income portfolios which are mostly actively managed. This amounts to around EUR 20 billion. The remaining EUR 15 billion is allocated to cash flow or duration match portfolios focused on minimizing interest rate risk. Regarding the euro area, overall yields and duration are slightly up. In our other markets, the Brazilian portfolio shows a marginally lower yield of 12.5%, while duration is stable. In North America, yields and duration remains unchanged. As you can see, our portfolios are well positioned to navigate the current volatile environment. I will now hand the floor over to Jose Manuel to make a few closing remarks.

To wrap up, we have had a very solid start to the year. The first quarter results clearly confirmed the strength and resilience of MAPFRE's business model. We are seeing improving profitability trends across geographies and products, reflecting a gradual recovery by maintaining a robust financial position with high solvency levels and disciplined capital management. At the same time, we continue to operate in a highly uncertain global environment and in a competitive market with signs of softening in certain insurance and reinsurance segments. Our discipline and technical excellence is more important than ever, and we remain firmly committed to profitable growth, sound underwriting and prudent reserving. As proven in the past, MAPFRE has successfully navigated complex market cycles, and we are well prepared to do so once again. We are well positioned for a return to growth maintaining leading positions in Spain, where we are growing in the total number of clients, especially in homeowners and health. We are also proud to say that our recent NPS figures show that we hold leading positions and that our clients appreciate our efficiency, reliability and proximity with a wide physical network. We will leverage on these trends. As I already mentioned, we feel Latin America should keep providing stability and is a region that could benefit from the current geopolitical situation. MAPFRE RE should continue to deliver strong results with a diversified product mix, prudent underwriting and solid reserving. Our diversified business model, prudent risk management and disciplined strategic execution are key strengths that allow us to navigate the current cycle from a position of resilience and strength. We are well positioned to meet our targets, reinforcing our strong commitment to shareholders while maintaining discipline in a demanding market. Additionally, Currencies are becoming less of a headwind and financial income remained strong. In conclusion, after years of hard work, we are now where we want to be. Performance is excellent. Our balance sheet is strong, and we can leverage our leading market positions to return to growth. I will now give the floor to Leandra to begin the Q&A session.

Thank you, Jose Manuel. As a reminder, you can use the Q&A tool on the bottom of your screen. We will group the questions by topic and answer them as time allows. Now let's start with the first group of questions. We've received some questions regarding the MAPFRE RE-business. In particular, Juan Pablo in [indiscernible] from Santander Bank [indiscernible] would like to know. You've been increasing the prudence in reserves for several quarters. Should we expect this to continue in the next quarters? Given the already conservative stance in 2025, could you quantify or give us an idea of the level of provisioning of the MAPFRE RE business?

Thank you very much, Leandra, and thank you, Juan Pablo, for your question. In terms of MAPFRE RE, it is true that we have a probably better-than-expected quarter in terms of weather-related events. For the reason we did a provision in MAPFRE around 5 points of combined ratio that in quantifying terms was around EUR 50 million. But now we are just at the beginning of the year, probably the most difficult season for us in terms of weather-related evidence could be the second and the third quarter. So we prefer to be prudent.

We've received another question again regarding the reinsurance business. Specifically, MAX from JB Capital, I would like to know the impact of the storms in Southern Europe, on the combined ratio in MAPFRE RE. I can take this question Max, and we can follow up after the call. But we're looking at a pretax impact between EUR 40 million and EUR 50 million. which you can calculate later the impact on combined ratio and on the insurance business. We've also received another question regarding cat and weather-related events. Juan Pablo from Santander would like to know what was the impact of these same storms on the combined ratio for the general P&C business in Iberia.

Well, I think it's quite difficult to make a guess regarding the rest of the year. It is true that January and February were extremely in Spain and in Portugal. Probably, we have heard some comments that probably January was the most rainy country in the world in case of the Spain. And looking at the statistics, probably we were around 85% above the average of the last 25 years. So this has affected to some extent homeowners and condominiums, but on the other hand, probably we perceived that there were less traffic in the first quarter of the year. And probably, it has benefited as well to auto.

Thank you, Jose Luis. Maybe just to add specifically closely said that the large majority was in the homeowners and condominiums business, we're estimating a 70 impact on the combined ratio for General P&C. The next question is regarding our solvency position, the evolution between September and December. We've received questions from [indiscernible] as well as Juan Pablo at Santander. They would like to know what is behind this quarter-on-quarter reduction? And what should we expect for 2026?

Okay. Thanks, Leandra. Indeed, the change in the solvency position is mainly driven by the increase in both equity exposure and the equity risk capital charge. As you know, the capital charge for listed equity is 39% plus the symmetric adjustment. This adjustment is designed to reflect the fact that when equity markets are trading above the average levels of [indiscernible], the potential impact of a market downtown is higher than where markets have already declined. Since December, equidisposure has increased by EUR 360 million due to the rise in equity markets and the symmetric adjustment has increased from EUR 2.86 to EUR 7.90. This implies that the equity capital charge will increase by 12% over the year. In the last quarter, equities by EUR 261 million, while this metric adjustment increased by 1%. You asked about what our [indiscernible] in the future. Probably these 2 gradually reverse because during the first quarter and looking at the different situation in the financial markets, we prefer to be more prudent in our investment portfolio. So we slightly reduced in January, in February as well as in March, our exposure to equity markets. So probably we expect an improvement in the solvency ratio looking forward.

Thank you. We also have a question regarding the asset managed business. We've seen that assets under management are quite strongly up on quarter over 12%. Could you break down the contribution from market performance and net inflows?

Well, if you look at market performance, I think it's quite difficult to assess because probably January and February were very good months, but when you come to March. And we have the problem in the Middle East, what we [indiscernible] was high interest rates and lower equity valuations. So probably it's more subscription effort rather than market valuation.

Thank you. On a similar note, we have another question related to the asset management business. Juan Pablo, Banco Santander like to know if we would consider inorganic growth in this area, particularly in light of recent press reports regarding potential sales in the market.

I mean we don't usually comment any kind of transaction on the M&A until -- in any case, -- this is an area where we showed certain interest in the past. We have a very good agreement with Avante. I think that Jose Luis could comment after how we are developing this kind of business. And we are showing figures that are very encouraging on our own in these last months. This is what I can tell you. I mean, those kind of interest that we have been showing on the M&A side. we've been already exposed in the last quarter, if you want any further confirmation on the areas where we want to expand that a little bit glad to -- with a follow-up call.

Thank you, Felipe. We've received several questions today on the topic of growth, in particular regarding certain one-offs or the specific evolution of the general P&C business in Iberia motor, the reinsurance business, the life business. Maybe we can start with some general comments on growth, and then we can move on to the specific questions.

Yes. Thank you, Leandra. Just for going a general statement about growth. It's true that the first quarter has been affected for some factors. The first one is the exchange ratios which are still a headwind. They have taken out 2 points of growth from us. The second thing is some important one-off effects in Spain regarding life-saving products that we have an extraordinary quarter due to maturities in 2025, what hasn't been the case in 2026. And then in property casualty in Spain, we had a big issuance on the transportation, transport branch. Also in global risk, we have suffered these effects of different maturity renewal of certain business that has affected the first quarter. And the last effect it's been the market softening that we are seeing, especially in the renewables, the MAPFRE renewals. Having said that, we have a positive outlook on growth for the next quarters based on exchange rates effects will be reducing their impacts. And we -- even we think that by the end of the year, it will be exchange rates effect will be a tailwind and not a headwind. We will see -- we didn't -- we will not have these one-off effects in the next quarters. Will we see opposite effects in the incoming quarters. And based on the solid technical work that we have been doing in the last years, we are in an excellent starting point to growth in the coming quarters. There are many initiatives. We are very focused on growth with profitability, always with profitability. And we have a positive outlook on the growth for the next quarters in the company.

Maybe we should start with the Spanish motor business. We've received a few questions. I think the first was regarding the evolution of the insured fleet during the year. When do we expect this change in the vehicle fleet to plateau to stabilize? And what's our outlook for pricing going forward in Spanish Motor? And are we looking to gain market share?

Well, regarding motor in Spain, I think we have had, obviously, a really good quarter. As we said at the beginning, probably maybe a little bit affected by the weather, probably less frequency than expected. We have an excellent combined ratio. It's going to be difficult to maintain such levels, but probably it will be -- as we have said on the AGM, we aim to get something around 96%, 97%, even lower, if possible. So we are working hard on that area. And regarding growth, as Jose Manuel has pointed out, I think we are really, really looking for growth, but a reasonable prices, I mean we want to grow, but we don't want to damage. We don't want to affect the combined ratio. So we would look at the different opportunities. I think in terms of fleet, I think we are more or less stabilized. I think we have reached the point where we feel comfortable. This was the pruning of this part of the business were an area of improvement during the last 2 years. And I think that we have reached a point that probably run to declaim, probably we will see more increases looking forward. But we are positive in the position that we currently are. And the important thing is we are really prepared for growth.

Moving on to the reinsurance business. we had a few questions. The first was from [indiscernible]. He would like to know how we're seeing the evolution of tariffs at MAPFRE RE after the recent renewal period. And also, what's our expectation for pricing throughout the rest of the year? Do you think this will feed into the gross written premium figures?

First of all, I think that the trend is confirmed. I mean we are looking at the same kind of trends that we were announcing by the end of the year on the renewals of the part of portfolio. The renewals of April are not the most important for the group. It is only -- we are speaking of around 15% of the renewals. There was a reduction on the pricing, but we are as well confirming or opening new markets. I mean this is -- these were affecting mainly the Asian markets, and we are now owning an office in India. . So that is -- that will be contributing to the growth in the future. What we have right now is an environment on the reinsurance business in general, that is still compatible with profitability. I think that prices have been adjusted, but they are still in the margins that -- where the companies can make [indiscernible] the proof of it is the excellent results that we are presenting at the first quarter. and that should be following during the year.

Let me add that in spite of the reducing of the average premium because the softening of the market, which is a phenomenon for every company and every market, and we can do little for -- to avoid that. In spite of that, we have a very positive impression of the renewal press because we have seen consolidating our relationship with our long-term customers. We have acquired new customers and we are developing the baselines that we wanted to promote in the future in MAPFRE RE life insurance line. So we are happy with the renewal process, and we are optimistic about the next renewal processes that will be coming along the year.

We've also received a few questions regarding another one of our core business units, Brazil, both Carlo [indiscernible] Caixa, Max from JB Capital and Juan Pablo from Santander. We'd like to see the outlook of premiums for this year. And in particular, if the -- there will be an impact from the diesel and fertilizer shortage on the agricultural business.

Okay. I think it's a really long question. Let's try to [indiscernible] the question in several lines. I mean Brazil is doing pretty well. I mean sales remain strong. supported by sustained technical and operational improvements. I mean, probably is the business unit where we have the highest return on equity. The weaker top line is concentrated in agro and in life flotation, which are closely linked to credit and the interest rate cycle. It is true that this year, there has been a reduction around 25 basis points if [indiscernible]. But still, I mean, there is more area for improvement in rates. And probably if rates decline, if things normalize a little bit in Middle East, we assure that most interest rates in Latin America probably could fall a bit, which will help us as well in terms of premiums. But despite all these challenges, I think that MAPFRE has shown strong resilience and execution capability, and I think we look for growth in nominal terms. But also, as we mentioned at the beginning of this position, the currency movements that last year we suffer a bit after the announcements of the tariff. I think they are having some kind of Min rebation, as we have pointed out on previous quarter results. So right now, the real is stronger, around 10% compared to December last year. And we have a little bit of tailwind coming from the currency, and we continue with our growth, multi-channel expansion, our operational efficiency, probably we will see positive growth, not just in nominal and real but also in euros significantly.

If I may. Just for the question of the fertilizers and the cost of diesel on the Brazilian market, I think that you have to remind that maybe this region in the world is less affected by the straight of [indiscernible] blockage right now. So what we should expect is, of course, there will be some kind of increase of costs for the fertilizers and the diesel. But they are going to be much milder than the ones that we are going to [indiscernible] in other regions, mainly in Asia. So all in all, the outlook is more positive than in the rest of the world and any kind of impact is going to be more moderated.

We have one last -- one final question on growth. We touched upon it briefly at the beginning regarding the Life business. Specifically, [indiscernible], would like to know if the weakness in the quarter reflects a stronger [indiscernible] the competitive environment for the year.

To be honest, we don't see an increased competition coming from banks. It is true that some of the players has moved maybe from deposits to life insurance products and so on. But we see that we have an incredible opportunity. We have the aim to become the leader in [indiscernible] in Spain. We have more than 3,000 branches, more than 10,000 people really specialize in investments and savings and we would like to leverage on such capability. As most of you already know, we have changed a little bit the commercial structure at the beginning of the year. So we think that, that plus the new branding, I think it's going to help a lot to develop the business. So we are positive, and we will continue growing.

Thank you. Now we're going to move on to a few questions regarding the combined ratio evolution across different geographies. The first one is regarding Brazil. This question is from [indiscernible] he would like to know our outlook for 2026.

Okay. The outlook is -- continues to be quite stable. I mean I think that the main concern in the Brazilian market right now is the high interest rate that they're still showing. And then the consequences on the growth of premium. The combined ratio in the absence of any dramatic climate event should continue to be quite stable and positive. On the other side, we still think that the combined ratio that we are showing in the motor business is compatible with profitability, probably if there's a slowdown in the -- or a lower interest rate for the end of the year. Probably the combined ratio should improve in general in the market in the motor business. So all in all, I think that the trends that we are showing in the combined ratio in Brazil should remain at the similar levels.

Thank you. Regarding the Iberian business, many analysts have highlighted the strong improvement from Q4 last year to Q1 this year. I think the questions are -- have there been any one-off extraordinary impacts that we need to keep in mind? And how sustainable is the current level?

Well, regarding if there is any specific one-off benefit, probably, I don't know, we could say that the weather probably was [indiscernible] and less frequency afterwards. But we don't have any other issue that [indiscernible] as a one-off during the quarter. It is true that we have achieved this level after 2 years of working trying to reduce the combined ratio. I think we still try to compete in terms of quality in the marketplace. According to our features, our internal studies, I think that our customers are really happy with the service that they receive much more than any one of our competitors. And we will continue working on that line. If this is sustainable or not, time will say, but probably [indiscernible] in such a solid period of time probably is really high. So probably as our Chairman has said in the AGM, having a combined ratio around 96%, probably it is a target that we are working on better than level above. But once again, we want to grow, but we don't want to damage the combined ratio. In addition, we've received a few questions regarding our view on the impact of the current softening of the reinsurance market on the combined ratio for this year.

No major comments on this side. As I think that we said what we are seeing in the market is that there is a softening. On the other side, we can still say that the attachment points and the conditions that we are showing in the contracts are still on the more conservative side. So we see that these combined ratios could be compatible with profitability. Once again, what we have right now in the combined ratio is that there is a 5 points impact coming from the reinforcement of reserves, this EUR 50 million that Jose Luis already mentioned, and the combined ratio of MAPFRE RE should be continuing to be quite positive in the absence of big cat events. But I mean you know that we already say that we already said that the second and third quarter are key for the development of MAPFRE reinsurance profitability and performance during the year.

Thank you. We've also received a question regarding the NatCat budget for the year. Just as a reminder, we're usually looking at 10 to 12 points on combined ratio. And the question was whether the quarter, how it compared to this NatCat budget don't provide a NatCat budget on a quarterly basis. But as we signaled clearly and together with the strengthening, it was a benign quarter from a NatCat point of view. And we have one final question from -- in MAPFRE RE regarding financial income [indiscernible] commented that the results were very strong this quarter, both in Life and Non-Life. And were there any one-offs? I think we've touched on the provisioning side. Maybe in financial income, we can give a little more color.

As we described at the beginning of the Q&A session, at the beginning of the year after an excellent 2025, we thought that probably financial markets were in a point that everything could happen. And then for the reason we decided to reduce a little bit our risk profile in our investment portfolio and for such reason rather than to be overweighted in equities, we prefer to be underweighted in equities. If we do any mistake, we prefer to do the mistake in the most conservative space. So for that reason, we reduced exposure. We did capital gains. [indiscernible] view of feed before the crisis in the Middle East. So we did around EUR 50 million capital gains coming from on equity, which probably is, I don't know, around EUR 20 million, EUR 25 million more than last year for the same period. and it was exceptional due to the situation of the financial market. So right now, we have to wait and see what financial markets, how they will perform depending on the conflict. And as I said, the most important thing for us is if this is a short and conflict or [indiscernible] landing conflict because the impact that this will have an inflation, probably it could be high. This is our medium-term, long-term conflict. So this is the reason of the one-off in the financial income.

Thank you. Before we move on to the more strategy and target related questions. We have one that just came in now from [indiscernible] regarding the U.S. business. We mentioned that policies we're beginning to stabilize although premiums are down in local currency. Could you elaborate on the current market and pricing dynamics in the U.S.?

Yes. Policies are stabilizing, which is quite a very good news for us. And the gross driven premiums are quite stable in local currency. So that give us a view or point of view that the situation in the U.S. market is prepared to what Jose Manuel already stated that we were ready to start slowly growing and stabilizing the portfolio. On the other side, we are showing excellent combined ratio in the first quarter that was affected, of course, by the good climate on the -- during the first quarter. And we don't expect any kind of change unless there is any kind of big event. . What we see from the gross written premium is that the market is continuing to adapt prices to the reality. It is true that the increase of prices are much, much lower during the last years, and we were -- and they were all really fed into the profit and loss all the price increases that we did in the past. And the market is already competitive and stable, and we look forward for continuing to improve the profitability future quarters.

If I may add, we are particularly satisfied with the first quarter results in U.S.A., not only for the technical results, which are quite well with this 95% of combined buying radio, but also for the commercial KPIs, we -- after some quarters of technical, very hard clinical job. In this quarter, we have seen an increase in customers and we have seen an increase in market share, quote market share. I say after many quarters of working mainly in the technical aspects. So we are particularly happy with these results in our U.S.A. operation.

Thank you. We're now going to move on to the final set of questions. They're surrounding our recently announced targets at the AGM. As a reminder, we have our main public targets or the growth target, on average over the 3-year strategic plan, excluding life savings at constant exchange rates. We also have our combined ratio target and our ROE target. Specifically, they would like to know how do we see ourselves positioned to meet both the growth target and the combined ratio target? And what risks are there from now until the year-end for the combined ratio to move upward from the current level?

What I say is that I can say that we maintain the commitments, the public commitments that were adopted in the regarding ROE. And regarding combined ratio, we are fully on track to fulfill the commitment by the end of the year. And we also maintain the growth commitment, the 6%, which is a constant exchange rate and it's an average, and we still maintain the commitment that was recently down in the AGM.

Thank you. Well, we'd like to make a few closing remarks with no further questions.

Yes. If you make me, thank you for your question. If you make me some -- to make some closing remarks. The first thing is that we present what I will call a fantastic first quarter from the point of view of the technical results, very solid results based main absolutely technical improvement, no extraordinary results coming from the business coming from the financial results. So that is the result of many years of some years of working in technical aspect, in pricing, in containing expenses, et cetera. So this is the first thing. The second thing I would like to speak a little bit more about growth. It is true that in the first quarter, we have suffered from some punctual nonfavorable effects but we are positive. We still have a positive outlook of coming quarters. The first thing that this negative one-off effects that we have had in the first quarter, we will not have it in the next quarter. The second thing is the solid technical result that we have got. And this is a very good starting point to have a profitable growth in the future. There is another thing we haven't usually, we don't mention, but we have got excellent NPS net promoter score qualification in our main geographies. So this is a very important basic point as well. And we are in the process of deploying or already deployed many commercial initiatives on track at a corporate level and also in the main geographies. So this is why we think that we could take that 6% commitment on average by the end of the year, and we will see growth in the next quarters. The third thing I would like to highlight is the process transformation is ongoing. We have deployed a very strong data governance in almost all the geographies in which we operate. We have an internal database, which is called [indiscernible] gradually in the main countries. We are deploying AI in the main processes of the company across the company, across the geographies for -- to give just an example, in Spain, we have 100 users case with EUR 28 million of positive impact on the profit and loss account. Our main system, our main IT system transformation plants are on track in Spain, in U.S.A., in Germany and in other countries, and we are working even in new ways of working more efficient and more agile within the company. And the last thing I would like to highlight is the brand transformation process that we have said at the beginning of the year, it will not see the transformation plans are on track, in Spain, in U.S.A., in Germany and in other countries, and we are working even in new ways of working more efficient and more agile within the company. And the last thing I would like to highlight is the brand transformation process that we have suffered at the beginning of the year. It will not have a short-term impact on the company on the growth, but it has been received as a very positive -- with a very positive feedback and the KPIs relating to this brand recognition, brand valuation, et cetera, we have seen a very positive impact. And we have no doubt that in the midterm will be a strong contributor to the development of the company. So overall, so overall, taking into account, of course, the geopolitical situation that is -- we are monitorizing it every day. We have for the internal strengths that we have a positive outlook, a reasonable positive outlook for the rest of the year.

Thank you. Thank you, Jose Manuel, Jose Luis and Felipe, for your time today and thank you for all of you who have connected. Before we close, as a reminder, all the documents are available on our website in addition to the 2025 embedded value figures. And also as a reminder, we're hosting a meeting next Monday afternoon in Madrid for analysts and investors. You should have received the invitation. If you haven't or haven't confirmed yet, please reach out to us. Thank you.