Good afternoon, everyone, and welcome to MAPFRE result presentation for the full year 2021. This is Felipe Navarro, Head of Investor Relations and Capital Markets, as well as Corporate Treasurer. It's a pleasure to have the opportunity to see you again in person. We want to welcome especially those who have come today to Fundación MAPFRE's auditorium to attend this event. Hopefully, we can return to normality in the coming months, and we'll be able to gradually resume personal contact with all of you. For safety reasons, all the people in this room have been tested before being admitted. On this special occasion it's a pleasure to have Mr. Antonio Huertas, our CEO. He will give us an overview on the key highlights for the year, as well as some reflections on performance during the last strategic plan.
For more details about the new strategic plan, you will have to wait to our next AGM. That will be held on March 11. On our website, you will find more details about the AGM agenda together with the full year disclosure and annual report. It is also a pleasure to introduce Fernando Mata, our CFO, who will walk us through the main financial trends. Before we start, let me explain some organizational details. This time, you will have access to interpretation services, both here and at home. Please feel free to choose the language that better suits you, either English or Spanish. As usual, at the end of the presentation, we will open the Q&A session. The questions can be made either in English or Spanish.
For those of you who are here with us today, you will have the opportunity to ask your questions in person. For those you connected online, you can participate with the Ask a Question link in the bottom of your screen. We will try to answer all the questions as time allows. The IR team will be available to answer any pending questions after the call. Now, let me turn the call over to our CEO. Antonio, the floor is yours.
Thank you, Felipe. I hope you are staying healthy. It's my pleasure to be here with you today, as Felipe said, in this event that once again it's taking place in person. The first thing I would like to say that we are very happy with our results. Our development during the last year has been very positive. Let me now say a few words about the last fourth quarter before to analyze the whole year and even the development of our last three-year strategic plan. First, we saw during the last quarter a significantly lower impact from COVID in the life protection and health claims in LATAM. In Brazil and Mexico, we expect the improving trends to consolidate, but we will have to see how Omicron develops in the Americas during upcoming months.
Thanks to growing vaccination rates, we expect a similar pattern as in Europe with high infection rates, but putting less stress on healthcare systems and lower mortality rates. Also, there has been an increase in the motor combined ratio across geographies driven by the economic recovery and increased mobility. The pressure on average premiums during the last two years as a result of premium discounts and other rebates implemented during the pandemic to protect our portfolio also put pressure on the ratio. These discounts will continue to be phased out, and we will closely monitor inflation. Also, improving trends in homeowners also helped mitigate the increase in motor claims. Top line, general top line performance was outstanding. In Iberia, there was a strong growth in non-life, especially commercial and condominiums.
Also in motor, we beat all the markets in the largest line where we operate. The life savings business had a good quarter on the back of large group life policies. MAPFRE RE was also growing in double digits supported by tariff increases. January renewals have taken place in positive terms. Finally, in Brazil, premiums were up with a strong bancassurance performance. Results were also strong, especially in Iberia and Brazil, despite normalization of motor trends, where reinsurance benefited from the absence of relevant Nat Cat losses. We actively managed our portfolio, which allowed us to continue opportunistically realizing gains during the fourth quarter, especially in equity, reaching over EUR 50 million. This is evidence of a well-diversified portfolio and successful investment management.
Furthermore, we still have over EUR 100 million of unrealized gains left in our actively managed non-life portfolios in the Euro area and North America. We have also reached a turning point in our fixed income portfolio. After year-on-year declines on yields, we have seen stability in Europe and even increases in some Latin American markets. We have also taken the opportunity to reduce duration. Finally, we closed, as you know, our agreements with Bankia, helping us with the proceeds to reinforce efficiency process. Excluding the impact of restructuring, we finished the year with an expense ratio under 28%. In conclusion, about the fourth quarter, these quarter results give us reasons to be very positive with our outlook for 2022. Let me continue now by giving you an overview of the key highlights of 2021.
We have returned to growth in our main markets, gaining market share but with a disciplined approach. We are also benefiting from a more stable evolution of currencies. Revenue performance was outstanding, reaching over EUR 27 million. Total premiums are up over 8%, and the insurance business has grown by 9% with outstanding performance in Spain. MAPFRE RE has recorded a 10% increase, and premiums in Brazil were up by 15% in local currency. Profitability has also been strong, meeting important metrics for our 2021 guidance. We can boast a EUR 765 million net result, up by 45%. The ROE was up nearly 3 percentage points, reaching 9%.
Performance at Insurance Units was also outstanding, supported by active management of our investment portfolio and the extraordinary income from the Bankia resolution, offsetting the losses from COVID claims, especially in life premiums in LATAM, as well as Nat Cat events. We are also quite satisfied with the performance at MAPFRE RE, which has returned to robust profitability. Transformation is also one of our main priorities. We are streamlining our business model and structure while leveraging the benefits of diversification. We continue prioritizing spend reduction. In December, we announced additional restructuring in Spain and Italy, provisioning over EUR 200 million throughout the year. In Spain, we are adapting our operational model to changes in our clients, channels, and the market context. This new model is the result of advances in digitization as well as the need to centralize several functions, including underwriting and claims management.
New technologies will allow us to work with more efficient structures and centralized management. In Italy, you know the dealership channel was considered non-strategic, and we are adapting our structure while investing in a plan to move towards a pure digital operation, replicating the business model currently used in Spain and Germany. There have been also smaller restructuring plans executed in the Asistencia business as well in Latin America with a more limited impact on results. We are also focused on our footprint, and we are selling operations in non-strategic countries in the Asistencia business with the recent announcement of the sale of the InsureandGo business in Australia. We are also realigning our reinsurance position in Asia. Furthermore, in the U.S. in the fourth quarter, we continue the moving ahead in our exit of the state of Florida.
We have also signed an exclusive agreement with AAA in Washington and Northern Idaho for homeowner and car insurance distribution in line with our support to this alliance with this important motor club in the U.S. As for the Bankia transaction, we have now closed that chapter and now more than ever, we will be focused on new business opportunities and growing profitably. Finally, we are committed to creating sustainable value for our shareholders. The board has proposed a final dividend of EUR 0.085 to be approved at the AGM in March. Together with the EUR 0.06 that we paid in November, this brings the total dividend paid against 2021 fiscal year to pre-COVID levels at EUR 0.145, which is what we had promised to deliver. We can't emphasize enough the strength of our commitment to our shareholders.
Just as a reference, for the last five years, our dividend yield has outperformed the IBEX by over two points and has not gone below 4.5% in the last 10 years. Now, a brief overview about our development during the last three years. The three-year strategic plan was strongly affected by changes in the economic and market context as a result of the pandemic. Obviously. We provided annual guidance for 2021 to give a clearer view of how MAPFRE could evolve in this new context based on our outlook at the beginning of the year. On the revenue side, we outperformed guidance, reaching over EUR 27 billion when we had expected flat performance during the year. Growth has been excellent, underpinned by strong commercial activity, the economic recovery, as well as supportive reinsurance pricing.
We had guided to 3% growth in Insurance Unit, and we finished the year at 9%, despite challenging market conditions, which is a proof of successful commercial strategy and the trust of our clients. Additionally, we finished the year with an adjusted result in excess of our EUR 700 million target, excluding the net impacts from Bankia. Most importantly, we have continued to reiterate our strong commitment to shareholders, returning to pre-COVID dividend levels with a payout above 50%. We have achieved this while maintaining an excellent solvency and liquidity position. We have consistently met our 50% minimum payout commitment since 2012, even in the worst moment of the COVID-related crisis. It has been possible thanks to our strong solvency and financial flexibility, and continuous dividend upstreaming from the business unit.
We had guided to an adjusted ROE of 8.5%, excluding the impacts from Bankia. We closed the year slightly lower at 8.3% due to the pandemic impact in LATAM, together with continuous restructuring and rapid normalization of motor mobility. The combined ratio closed 2021 at 97.5%. Adjusting for restructuring costs, the ratio was 96%, one point above guidance, mainly due to the fast-changing trends in motor and Nat Cat losses. All in all, we are quite happy with the results this year and throughout the entire three-year plan, given the challenges faced and the constantly changing environment. Thank you. Now, I will hand the floor over to Fernando, please.
Thank you very much, Antonio. Good afternoon, everybody, and good morning, those in the Americas. Now I will comment on some of the full year figures. Premiums are up over 8% in euros. There is a slight difference from the advanced figure released in January due to minor accounting adjustment that affect mainly in North America. We published a 7.8% growth in premiums, and the final number is 8.2%. At constant exchange rates, growth was 10.7% with a strong trends in both non-life and life. Currency movements reduced growth by approximately 3 percentage points with the average exchange rates for the U.S. dollar down around 3% and the Brazilian real down around 6% on the year.
On the other hand, you know well the renewal of the multi-year policy in Mexico added over two points to growth. The combined ratio was affected by the return to pre-COVID mobility levels as well as the provision booked for restructuring in Spain and Italy throughout the year, of which EUR 173 million were allocated to non-life and another EUR 28 million were allocated to life. Excluding this provision, the non-life combined ratio would be 96.1% for the group and 95.6% at Insurance Unit. Regarding the attributable results and ROE, both metrics were already commented on by Antonio. Finally, shareholders equity is slightly down on the year, mainly due to the reduction of unrealized capital gains due to the rise in interest rates.
The pandemic and the economic scenario is bringing more complexity to our operations and producing a wider range of individual extraordinary items. We know that this can make it difficult to follow the underlying trends, and in order to provide more clarity, we have classified these extraordinary impacts into two different categories. The first comprises large non-operating transactions, which are usually non-recurring. These include, for 2020, a goodwill write-off following recommendation for prudence from ESMA. For 2021, an extraordinary gain from the termination of the Bankia agreement and the related restructuring costs. Adjusting for these impacts, the attributable result would have reached EUR 703 million in 2021, up almost 7%. Please bear in mind the additional 10% compensation from the termination of the Bankia agreement, which will amount to EUR 52 million before taxes and minorities, is still pending arbitration.
The second category of extraordinary items refer to those linked to the ongoing business management, such as individual significant losses like Nat Cat claims and COVID losses in both the reinsurance and the life business in LATAM. This category also comprises capital gains realized on the equity portfolio in Iberia, in MAPFRE RE, and the USA. We took advantage of favorable equity markets throughout the year to compensate the aforementioned large losses. Gains in actively managed portfolio were around EUR 140 million, significantly up on the year. Even so, at the end of December, there was still over EUR 100 million pre-tax of unrealized gains in equity in our actively managed non-life portfolio in the Euro area mainly and North America. Full disclosure of the different components of these items are included in the annex.
Also, we have included a full disclosure of the Bankia gain and the related restructuring costs with a comparison with the preliminary figures that we presented in December. During 2021, insurance operations contributed over EUR 18 billion in premiums and over EUR 700 million in results to the group with an adjusted combined ratio of 95.6%. There have been two main trends related to the pandemic. First, in Latin America, the life protection and health businesses were still heavily impacted by COVID claims. Secondly, as the chairman, as the CEO said, motor mobility and related frequency has almost converged to pre-pandemic levels across all geographies. Let's go with Iberia. We like to highlight the positive performance of these units. Premiums are up 8.5%, outperforming the market in both life and many non-life segments.
We're growing over 1% in motor, while the market is down 1% with vehicles insured up nearly 4%. Growth is also robust in other segments with high single digit growth in health, condominiums, and commercial lines. Combined ratio has increased to 98% with a 3 percentage point impact from restatement plans. Adjusting for this, the ratio was 94.9%, up three points during the year. The increase is due to both higher motor mobility, especially during the fourth quarter, as well as the impact of premium discounts from the last two years on the average premium. The net result was up significantly on the back of the Bankia transaction. Adjusting for this, the net result is still at similar levels as 2020.
In Brazil, premiums were up over 8% and 15% in local currency with healthy growth trends in agro, motor, and life protection. The attributable result reached over EUR 74 million, although still affected by the impact of the pandemic on life protection. Combined ratio remains pretty strong, well under 90%. The economic outlook continues to improve and the Selic rate is significantly up. The currency is relatively stable compared to last year, while we're keeping an eye on inflation and trends. Premiums in LATAM South grew over 11% in euros, and premiums in LATAM North are up over 8% when excluding the large multi-year policy in Mexico.
Local currency growth was solid in most segments, and it's worth mentioning Colombia up 31%, Peru up over 16%, Dominican Republic up 9%, and Panama up 8%. Performance in North America continues to be affected by strong competition, premium rebates, and growing mobility trends. In the U.S., we should expect growth to catch up as new rates phase in. Eurasia premiums are down due to the non-renewal of an important dealership distributor in Italy, as well as the depreciation of the Turkish lira. All countries have contributed positively to results except Italy, which was affected by the restructuring cost. Premiums are up over 10% supported by positive pricing trends. The combined ratio is 97%, which was affected by one large Nat Cat event. You remember Storm Bernd that hit Germany and Central Europe in summer.
The net result is up significantly, both in reinsurance, up over EUR 116 million, and also in global risks, up EUR 19 million. In assistance, volumes are down over 21%, and we continue with the streamlining. The unit, let me say finally, has reached breakeven, and next year should be less volatile. At the end of December, some operations are held for sale in Europe and Asia, and which are expected to be closed in the first half of 2022. On this slide, I would like to comment on the life business at Insurance Units. In Iberia, premium performance has been outstanding thanks to the rollover of product maturities with a focus on unit-linked. There were also several large single premium growth savings policies issued during the second half of the year.
In Brazil, local currency growth was healthy with improving trends throughout the year, helping offset the fall in the currency. The life result was relatively stable at EUR 183 million, with an increase in Iberia offsetting the deterioration in LATAM as a result of higher life protection claims from COVID. In Brazil, mortality has been steadily falling since June, good news, finally reaching a turning point in the fourth quarter. The situation in Colombia and Peru is also improving, while in Mexico, claims experience was still high during Q4. In Iberia, there have been several extraordinary impacts. Adjusting for the Bankia transaction and restructuring, the result is up over EUR 30 million, mainly due to the release of an unearned provision, probably you remember in June, from the bancassurance channel.
There was also a positive impact in the year from the effect of the higher discount rates on provisions. On the right, you can see the total impact from life protections claims in LATAM in the year was EUR 107 million, of which EUR 42 million were in Brazil. In the rest of Latin America, the strongest impacts were in Mexico, Colombia, and Peru. However, trends improved during the fourth quarter, as I said, which makes us more optimistic about the outlook for the coming year. I would like to say just a few words about assets under management. Spanish sovereign debt continues to be the largest exposure in our portfolio with EUR 12 billion, followed by Italian debt with EUR 2.8 billion. A large share of these positions are allocated to immunization portfolio.
The investment portfolio is slightly up, mainly due to the rally in equity markets, which helped mitigate the fall in fixed income investments driven by higher yields, with the Spanish bond up over 50 basis points during the year. It is also worth mentioning that around 30% of equity and mutual funds are in actively managed portfolio, and the remaining 70% is in live portfolios where the investment risk is mainly borne by third parties. Our cash position should be highlighted with [2%] maximum at year end. 2021 was a great year for the asset management business. Pension and mutual funds are growing 12% and 19% respectively, both due to market movements as well as net contributions, reaching nearly EUR 600 million for both products. On the top are the details of our euro area actively managed fixed income portfolios.
Market value of these portfolios is around EUR 12.3 billion. In the Iberia non-life portfolio, the yield is around 2%. After year-on-year declines, we have reached a turning point, and the yield is up 7 basis points. The yield in MAPFRE RE is also up on the year. In non-life, we have reduced duration significantly over one year in Iberia and slightly under one year in MAPFRE RE. As a reminder, the long duration in Iberia non-life is mainly due to the burial portfolio with over EUR 1.7 billion and with duration over 19 years. On the bottom, you can see the details of the fixed income portfolios in other markets with portfolio yields up around 90 basis points in Brazil.
Now over 7% with relatively stability in North America, while in this region, market yields are up over 60 basis points, which makes us more optimistic about reinvestment rates. Shareholders' equity stood at a little over EUR 8.4 billion, slightly up on the quarter. Currency conversion differences are up EUR 139 million on the year, stemming from a notable appreciation of the U.S. dollar together with stability in the Brazilian real, with a slightly improving trend during this last fourth quarter. On the negative side, there was a 40% decline in the Turkish lira, which had an important impact on equity, EUR 41 million euros. On the right, there is a breakdown of currency conversion differences, annual movements, and the standard sensitivity analysis that we produced.
Net unrealized gains on the available for sale portfolio were down EUR 478 million, mainly due to the increase in interest rates in the euro area and also the U. S. On the other hand, unrealized capital gains in equity, this is good news, were up by over EUR 60 million. The breakdown of the change by region is as follows. LATAM, a fall of EUR 144 million. Iberia, down almost EUR 200 million. MAPFRE RE and North America, both down around EUR 65 million. The chart on the left, you can see the breakdown of the capital structure, which is stable year-on-year, amounting to nearly EUR 13 billion. Our own equity is the largest component, representing over three quarters. Leverage is around 24%, slightly higher than the previous year, but within our risk appetite.
As you know, in December, we announced a tender offer targeted at bondholders of MAPFRE senior bonds. As a result, nearly EUR 143 million were bought back. This was temporarily financed with short-term bank debt, which was fully canceled at the beginning of 2022 once the proceeds from Bankia transaction were streamed from Iberia to the holding. Considering this, the leverage ratio would have been a little over 23%. As always said, we will continue analyzing opportunities to actively optimize our capital position. On the right, you can see solvency ratio was a little under 194 at September, near the midpoint of our range, stable in the quarter.
We will release full year figures in March, beginning of March, and the ratio should convert to the 200 target as a result of the Bankia transaction. Well, it's here finally. I know it's quite a little bit complex, but this is the first time we're gonna give you some ideas about the new IFRS. I would like to say something about the current status of the IFRS 17 and nine implementation, which by the way is on track and will be ready to go live for 2023. We started the process three years ago, and most major decision at the group level were already adopted. There will be still some fine-tune from local perspective, although we are not expecting major changes for business and management. What are the main changes that will be introduced?
There will be a new accounting disclosure of insurance contract figures together with changes in valuation methods. In our case, it's not that big change because around 70% of premiums will be valued under the Premium Allocation Approach, quite similar to the current one. 5% under the Variable Fee Approach, similar as well. The remaining [25%] will be valued under Building Block Approach, the new methodology brought by the IFRS. We should expect a limited impact in P&L. Other changes include the mark-to-market of liabilities, eliminating the need for shadow accounting adjustments and bringing forward potential losses in both assets and liabilities on an ongoing basis. Finally, there will be a change in the treatment of equity investment in portfolios classified as fair value through OCI.
Previous capital gains and losses will be recorded directly in other comprehensive income, OCI, not in P&L as we are doing currently. Furthermore, this investment will not be subject to impairment tests. Overall, which is the good thing, we do not expect major implication on strategy, business management, investment policies, nor risk appetite. We know it's complex and for the time being, current KPIs for business management will be kept in parallel with the new IFRS KPIs when available, because so far we're still waiting for these KPIs. For capital management, we do not foresee any impact on dividend upstreaming, leverage, or solvency. Regarding fixed income, no relevant impairments are expected and credit risk exposure, particularly in Latin America, will continue to be actively managed. We'll keep you obviously updated through the year with any news.
Now let me hand the floor over to Antonio for the closing remarks.
Yes. A couple ideas more to make some thoughts about our development during the last year. As a conclusion, in 2021 we experienced a quite strong growth with excellent performance in our main markets. First of all, as I said at the beginning of my presentation, we are very satisfied in general, but more obviously with Iberia, our largest operation, and we are well positioned for profitable growth. We are moving ahead with our transformation and digitalization plans to have a leaner and more efficient operations. Profitability is robust in the U.S. also, especially in the Northeast, and we are benefiting from a successful restructuring process. The integration of the U.S. Assistance Operations will bring us scalability. Scalability benefits in general and new business opportunities while we continue strengthening our growth capacity and multi-channel approach.
In Latin America, we successfully adapted our business model to the new environment. The pandemic and economic situation in this region remains challenging, but with a significantly improved outlook. MAPFRE RE is reporting resilient results underpinned by its investment approach and a strong contribution from MAPFRE Global Risks together with an improvement in pricing environment. These results have allowed us to meet our main metrics in our 2021, and we got close to the other two. We are committed to creating long-term value for our shareholders, and thanks to our strong solvency and financial flexibility levels, we have been able to return to our pre-COVID dividend. Sustainable dividends going forward will be supported by positive growth, momentum, and profitability trends.
We will be carefully monitoring the impact of post-pandemic normalization of motor across markets and implementing tariff measures to help offset this impact. As I said earlier, we will reveal the details and targets for the new strategic plan from 2022 to 2024 at our AGM on March 11th, which will be focused on growth, accelerating our transformation, continuing to streamline operations, boosting digitalization, and implementing new measures to improve motor profitability.
No more. Thank you very much for your attention. I will now hand the call over to Felipe to begin the Q&A session. Thank you very much.
Thank you very much, Antonio. Please let me remind you briefly the details of this Q&A session. First of all, we are honored to have here with us Antonio Huertas, CEO of Mapfre. As we understand that there will be a lot of moving parts in the numbers of this quarter as a result of the Bankia transaction, we would appreciate if you leave this nitty-gritty of the specific numbers for the IR team after the call. I mean, we will be at your disposal. Those of you who are here in person can raise your hand, and we'll give you the floor so that you can ask questions. For those of you home or at the office, you can use the platform, and I will read the questions.
It's possible to ask the questions both in Spanish or English for your convenience. Don't forget to use interpretation service at your disposal, so that you don't miss any details. Just as a reminder, for those here with us in person, please introduce yourselves before asking your questions. It's quite difficult to see with the lights. Now let's start with the first question. Is there somebody from the floor? Yes.
Paco.
Yes, hello.
I'll be using Spanish.
You can use Spanish. Yes, yes. Francisco Riquel from Alantra.
Thank you very much for your presentation. Thank you for giving us the chance to come in here and be in person and listen to it, live. Thank you again, once again. Two questions, if I could. The first one is about your business in Spain and the combined ratio, that 95% or 94.9% that you have reported with those one-offs. The question is, do you think this is sustainable as a ratio, thinking about the inflationary and high-cost environment that we have, particularly for the employment aspect and thinking about poverty, et cetera? Could you perhaps also expand for us on the savings that you will be making for the restructuring plan that you presented today?
As industry leaders, talk to us about tariffs, could you? You are working on your renewals in the industry, both for motor and other lines, aren't you?
Anything else?
I did have another question.
Yes, go on. Go ahead.
Then there is another question. I think this is the second one. Could you give us some guidance on once the Bankia issue is all out of the way, what is your best estimate for the surplus capital that you will have by the close of that process to be able to invest? And what are your strategic priorities there for that investment?
I'll answer certainly the first question before passing the floor to my colleague, yes. Yes, you're right. It's a good combined ratio, but it can always be improved on here in Spain.
We're still living through very uncertain times. I'm thinking here about the impact on mobility and the new normality, the new normal, which hasn't really got to its full point. We haven't yet got back to frequency levels that we had in pre-COVID times. There is this upward trend, definitely in motor insurance. We've identified this quite clearly. I'm talking about motor, yes, all the time. In this new context, the market tariffs will have to go up, but the level of sophistication in the market pricing that each company has in Spain will allow us to do it one way or another.
We are absolutely clear ourselves that we have the ability, the capability to be able to, you know, penalize those bad risks and to be able to give good rates for the good risk. The combined ratio for motor for the end of the year was not that good. And generally, I would say the business line has performed worse than we usually expect it to perform. Of course, it was an exceptional year, wasn't it? Particularly 2020, when there was hardly any vehicle mobility at all. There were other relevant impacts. You've mentioned yourself, price increases, inflation, and, of course, the impact of the update on the different parameter that we have. We do think that we can bring the combined ratio figure up to somewhere close to pre-COVID levels.
Of course, we have pressure on ourselves as we are market leaders, but we have shown everyone that we are able to keep a good level of pricing to be competitive, high level of technical expertise, and we can still gain market share. Yes. Let me take that question about the pricing range, that so-called pricing range. We've always done this. We've always updated, and I think EUR 10 million has perhaps been the impact there. With no impact at all on the tariff, the inflationary environment isn't that relevant. The question about Bankia. We will, of course, earmark EUR 200 million to the restructure. We have to pay our employees. What else? Well, we're actively looking around, of course. We've said this many times before.
We want to grow in our key markets. Of course, the Spanish market is key to us right now. We would like to also grow in those channels where we have lost our proportional weight in the digital business and bank insurance. The capitalization, we don't know that yet. I think we'd expect perhaps it'd be between +200. We will be publishing this. We would probably have that figure by the time we get to the shareholders' meeting, and we will disclose the figure in the first week, of course, in January, March rather. Apologies, March. Savings, we haven't updated the figure yet because of Italy. We haven't got the full figures yet for Italy. As you know, we're still negotiating in Italy.
Most of that, of course, will be earmarked for reallocations for suppliers, et cetera. We still need the final figures from Italy. I would just say that in December the figures, the right ones in the net effect in 2022 when combined, all of the effects for restructuring plans are everywhere, will be EUR 24 million. In 2023, EUR 41 million. In 2024, EUR 46 million. That would be the savings that we'll carry forward. That will of course help us to offset the lack of profit that we from Bankia, that life part of the business. EUR 44 million was the total of the four quarters that we. That is the amount we will not of course have on our books in 2022.
What we will do is protect our non-life portfolio. I'm not sure that has been published probably, but we've lost the new production. Our insurance clients are all there. We will ensure that they will continue to renew their policies, and we'll cover their needs. This is just as what we've done in the past with Barclays and BBVA in the past for other portfolios. I think we just have to wait. When we talk about what are we gonna bring in new, I think you have to look at what's happened whenever we've seen people go off in the market to competitors. It's usually because we are not keen on having them. We will continue to protect the ones we have on our books now, Santander, Bankinter.
We should perhaps take better, more advantage of the Bankinter partnership we have with P&C Insurance. We've done very little over the last 10 years. We really do need to protect our position there with CCM. It's now Unicaja. After the restructuring process, we've stayed on with that merged bank. We would hope that in this final phase of the competitive tender that we might be able to do more there.
Well, thank you very much.
We have a question that has come in online. Andrew Sinclair from Bank of America is asking, "When do you expect the impact of COVID on premiums will disappear from pricing?"
Well, thank you, Andrew. We've already seen that effect come through in the combined ratio. That is the premium that is not used.
In early 2021, all those discounts were already canceled. We still have Q4 to come in. I think there's a little bit more to be added there. There's no more of those discounts anymore in premiums. As we've always done, our tariff discounts are always based on the risk profile of the policyholders.
Questions from the floor, please.
Yes. Good morning. Jose Antonio Tamayo speaking. My question then. Those cost savings that you've told us about today, you mentioned Italy, didn't you? What about Spain? With the announced restructuring here in Spain, what cost savings can we expect you to attain thanks to that restructuring, or will your combined ratio improve as a result? Will you give us some figures?
You were talking about streamlining or simplifying your footprint, your geographical footprint, which I see you mentioned in the conclusions. What markets, if you can talk about the markets specifically, what markets would MAPFRE prefer not to do business in? Or what about your critical mass? Or maybe I could ask this the other way around. There are two markets, USA and Brazil. If you look at the volume of premiums right now, what would be a reasonable profitability that we might expect to get from those two markets in a few years' time? Because I can see there's a lot of room for improvement in those countries, despite you've got good results this year.
Let me start answering your second question first. The current situation.
Looking at our MAPFRE footprint as we move forward, I think we've made that public. In insurance, we're where we want to be. That doesn't mean to say that we're happy with what's happening in all the places where we are and we're happy to be in. It's very complex to exit business as an insurance company. You know that. Remember, in Latin America, we have a regional idea about the business, that sometimes the premium might not be high enough, but the contribution and value that we're making to be able to service our clients on a regional basis is big. It's true, though, that in other regions and other units we have that appetite. In the U.S. in insurance, we I would say that 95% of our business is now in Massachusetts, where we have a huge competitive edge there to be able to continue growing. That is the challenge that we have to face now with acceptable levels of profitability. They are not at that level now. Yes, of course, we have the U.S. position. Brazil, we have a plan, a major plan. Following the reorganization of our partnership with Banco do Brasil, we invested a huge amount to be able to reacquire those P&C insurance business. The whole plan really was curtailed by the pandemic. We have to wait for things to go back to normality in Brazil. It hasn't happened yet in Brazil.
There are still lots of ups and downs in the economic recovery there in Brazil, and mobility as well. Nevertheless, we're sure that the plan that we're implementing, which is from before, as I said before, we had to put it on hold during the pandemic, will be reactivated and will give us the results that we want. The platform that we have, there's a great commitment that we're seeing in the figures that we've reported to you. A lot of increase there in the figures. That's why we've had that excellent percentage increase in local currency. USA and Brazil, yes, we can improve things there. Nevertheless, there's still strategic operations for us. The challenge, well, we have Asistencia, yeah? The Asistencia business unit. We've exited from 15 countries over the last three years.
We were in 40 countries before, weren't we? That's a big step forward. We've also said that we would leave InsureandGo in Australia. We announced that. Asia is no longer a strategic priority for us in both our business lines, insurance and assistance. We will also say that in Florida, that this is an asset that is available. All of that would take us to a point where over the next three years, we'll be able to maintain our geographical footprint as it is. We don't want to expand on it, but we want to really build up our business in Spain, USA and Brazil. These are the three pillars in volume terms of our bottom line.
In Mexico, Germany, Puerto Rico, Peru, and global risks, rather, and Asistencia, that we have the main engines for growth. Now, the cost savings. José Antonio. I was talking about Spain actually with those cost savings, because we're still missing the figure for Verti, which is our recovery of debt.
Yeah. Thank you very much.
We have a question from María Paz Ojeda from Banco Sabadell. She's asking about Brazil's combined ratio. It's at 88% right now, which seems quite a strong combined ratio. What is the key contribution? Where did it come from rather from the combined ratio? Is that sustainable? What are expectations for 2023?
It is a great combined ratio. I want to say that, first and foremost, that 88%. The biggest contribution, of course, is the banking channel there.
As Antonio said, we're still having problems in the motor insurance line and in ag. It's the agricultural, the farming business. It's the biggest component there. Of course, the weather is making it very volatile. If the premiums are at the right level, then you've got the subsidies there from the Brazilian government. We think if that continues, then of course, our combined ratio will hold up over time. Provided, I was gonna say this, things go well. We haven't started the year off very well. There's been torrential rain in Brazil, and now there's a drought. This is a business line that up to now has been able to give us and report this excellent combined ratio.
Any other questions here from the floor in Madrid?
Well, let's continue with the questions that are being sent in online. Paz Ojeda is asking about Solvency II. What is the impact of breaking off from Bankia? And will that ratio change?
Paz, we had an estimate that we'd come up with, which we included in the MTMA. It's in Solvency. We did a standalone estimate, and we said that between 8-10 percentage points, this should be the improvement there. There are a lot of moving parts. We always say that, don't we, when we talk about how you calculate Solvency II. In the text, I said that 200%, in normal circumstances, we should actually reach that figure, underpinned by the Bankia transaction. But keep that figure in mind. 8-10 percentage points maybe is the range, slightly less.
We have to first of all see everything that happens once Bankia leaves.
Paz is also asking us about our guidance with regard to the targets that we've set out for the realized capital gains. EUR 250 million in the year was the figure. I think we're talking a bit more, aren't we? The question is, will we be getting back to that public target in 2022? I think particularly bearing in mind that we have the unrealized capital gains in equity that we filled up in 2021.
That's right. Yes. I think you've interpreted this correctly. We do have high exposure in equities, yes. That does, however, give us that flexibility that we need. We're able to offset adverse results because of one-off claims or COVID as a result.
Last year, we said it was EUR 100 million unrealized capital gains, and we used to say that, didn't we? Well, it's gone up. It's EUR 250 million this time. We often say that capital gains is like shaking a tree and the fruit falls off. No, this is active management of an investment, and you have to sell it when the price is high, and you have to buy when price is low. It's as simple as that, as straightforward as that, but you have to get it right. I would even dare to say that EUR 250 million is too much. I think we hit EUR 140 million in the three lines, and we've matched it. I don't know whether you saw the underlying result.
We've basically matched it up with the COVID impact in LATAM. Well, let's also look at IFRS 9. As I said before, we are not. Those unrealized capital gains in won't be able to go through the P&L account. You would expect us to have a lower figure for capital gains there in equities, and that would also mean that we have fewer adverse COVID-related or weather events.
Well, thank you very much. Any other questions here? If not, we'll carry on with questions that are coming in remotely. Paz Ojeda, once again from Banco Sabadell, is asking us about the breakdown or the details of the impact that we have put in related to COVID-19. EUR 37 million in Q4, higher than in Q3. EUR 22 million there were for MAPFRE RE.
Could you talk us through the breakdown of that segment and especially to give us a forecast for the next few quarters?
Yes. Thank you, Paz. What we've done has been to put MAPFRE RE COVID impact together with life protection in LATAM, because the underlying is the same thing there. It's a coverage there for deaths, basically, for life protection. Fatalities were slightly behind there with regard to the background there. MAPFRE RE has certain portions, certain quotas there of life protection there in LATAM. What happened in Q4 is that we had that time lag there that we. It's the financial entities that they report to RE and then to us. But anyway, the rest can be covered. That volatility can be covered completely at the level of MAPFRE RE.
Should not affect the final result. If you look at the trend, though, in our direct insurance information for the separation, that fall off in Q4, and particularly in frequency in December, well, should be seen again in MAPFRE RE. But once again, with that time lag, we're slightly behind there because of the way the information comes in. Thank you very much. Andrew Sinclair from Bank of America is asking, have you adjusted the price to for life protection adjustment against COVID-19 related claims or losses? Or you're just hoping, putting your trust and hope in the vaccines and maybe the fact that this variant is not as damaging as before, that you will go back to the pre-COVID claims ratios.
Thank you, Andrew.
Of course, we have to put all of our confidence and trust in our vaccines to help us. But they're not helping the insurance problems. We have to do that. They are helping us out with regard to health problems. Yes, policy by policy, we have to do some intense negotiation. That's exactly what we're doing in Latin America. There is a bit of a time lag there because some of those policies aren't necessarily annual policies. They might be multi-year policies. It's not easy or right to put in increases there for a very short return period to be able to offset what's happened with COVID.
For the last few months, for months now, we've been reappraising all of our contracts there, policies there, to ensure that we get that window for renewals and make sure that we can see the positive impact on the tariffs. We're quite optimistic because we've put this in process now, and of course, because of the mortality rate. You're right. The fatality rate of this new variant is lower. Of course, Latin American population, they're younger than the European population we have insured, and perhaps more resilient and more resistant to the fatality rate. It's about client and customer profile as well. Of course, we did have those adverse circumstances. We don't expect any adverse impact about this year.
If I could, Antonio, Andrew, at the end of the year, we have our supervisory college meetings, attended by representatives of the supervisory bodies from all over the Americas. We had a video conference meeting this time, and the perception is very clear on all sides. The insurance companies and the reinsurance companies, which is often the main distribution channel, as the regulators also see that there's a problem with the tariffs, the premiums. Because of course, the policies and the premiums of before did not contemplate a pandemic like this.
The only way this insurance model can be sustainable in Latin America is to get a consensus on the part of everybody, institutions, consumers, regulators, and insurance companies, that we have to adapt the risk premium to the pandemic.
Thank you very much, Fernando. We do have a few more questions that are coming in online. Felipe María from [Attensis] is asking about the future of cyber risk insurance. What are the key risks there?
Quite obviously, we could talk long length about that, as we were ourselves hit by a cyberattack, a major one here in Spain. I think it was about 18 months ago, wasn't it? It was August.
It's a reality, yes, but it's a reality that still has to be developed, and thinking about companies, and particularly the small and medium-sized companies that are our clients in MAPFRE and others here in Spain, other countries. The main concern internationally is how can we come up with solutions to this? We form part of course, an insurance association working on this, and there are other international institutions that are all trying to suggest solutions. It's always gonna be on the basis of a public-private partnership. We'll never be able to do that otherwise. We'll never be able to come up with the right solutions just on our own privately.
In fact, we can and we have brought out an insurance policy against cyberattacks for small and medium-sized enterprises, and it's been a massive success. We've sold rather thousands of policies for this online because there's been a lot of discussion, public discussion about these risks, and these small and medium-sized companies perhaps don't come to us for this product. If there is a good product on the market at the right price, they'd pick it up. I think it'd be about perhaps adapting this to the types of businesses and the amounts of money they're willing to pay for insurance. I mean, cyber risk for a country, I mean, it's impossible to insure that as an overall amount.
You have to break it down and fragment it to find partial solutions. It's not just about insurance there, it's about prevention. There's so much more that has to be done in the Spanish business sector here. There's a lot of fragility and vulnerability here. I think we need to advocate more information in our current plan that we were presenting in March. One of the areas or opportunities that we've quite clearly identified, with a certain level of uncertainty, of course, about how we are going to offer the solutions is cyber risk. Yes, it's an opportunity.
Thank you very much, Antonio. There's a question about the release of reserves on slide 8 of our presentation today. Fernando mentioned this release of funds.
What's been the impact, I think, on the combined ratio? Let me see. I think it was about the adjustment. Yes. Yes, I'm just checking through here. Yes, I do remember. Yes. Yes. It has no effect on the combined ratio because it's life. However, there are a number of marginal old portfolios which are not matched, but I'm talking about Spanish regulations here. Those flows are actually updated according to the risk-free curve. There are a certain amount of matching done between assets and liabilities in the sense that the fixed income, the capital gains or losses that come from the ups and downs there go to equity, whereas the provisions from the risk-free curve go through P&L.
As there are any sharp movements up and down there as in Q4, then you have the small amounts, so single digit, single incomes under the mathematical provisions. It's as straightforward as that. That lack of matching will die out with IFRS 17, quite obviously, and this is the very last year that we will see that. Quite obviously, there is a ceiling. You know, I mean, once you get a guaranteed income, the volatility disappears and there's no impact. Any brusque ups and downs there in the curve of a certain period of time in a quarter does, of course, lead to some drop there in the mathematical provisions. This is the old state.
There's another question about the impact of the release of reserves in Spain for the combined ratio. It's the adjustment for the recurring result. I think we say 17 million, I think is the figure, if I'm not wrong, that we're giving. For restructuring. Let me just check here my notes. Reserves, non-life or life? I think it's life. I think it was a life operation. There was a release of reserves there. Well, that was a non-insurance liability linked to a contingency. The earn-out provision that we were talking about back in July. It was effective up to December 2020, and once it was over, we just simply released that liability, that provision. Yes, I think we said that in June, didn't we? Batochela is asking about the agreement we have for health insurance.
About what prospects we have for that partnership. Well, we're always developing our multi-channel policies. We're looking for partners to expand that, and we have this exclusive distribution agreement for our health insurance policy through their big centers. It's nothing huge for the figures, if we're looking at just figures, but it's one way of helping our distribution and in the Spanish market. It's strategic as a business line. It's a strategic channel, and you've probably seen that we're growing more than the market. In 2021, we doubled the market. Yeah, I think we were almost 10%. It was 5% for the market. Thank you very much.
There's another question from Paz Ojeda about that 96.1% combined ratio in 2021, which was above the 95% target that we had set. She asked whether we could expand more on the main reason for that.
Well, Paz, I think the most difficult thing was to hit a 95% target with the pandemic on our hands. We have had a higher than guidance achievement for MAPFRE RE. The reins, I think it was 95.6% with all of our operations, and even in Iberia. Taking out restructuring, it was below 95%, whereas in the MD&A, we saw we were looking at three-year combined ratios, pre-COVID, COVID, and this year, with fluctuations of 10 percentage points up or down. Same with burials.
It's very tricky to see all of those drivers and those moving movements there that make up the combined ratio. We haven't put it in. We've talked about this, haven't we, Antonio? In-house, about the impact of the non-life COVID losses. We've only been talking about life here, which are relevant, but it's still a EUR 130 million, and a EUR 13 billion premiums there for that. It's just one percentage point increase in combined ratio for non-life COVID losses. Otherwise, we'd be at 95%. Well, with my hand on my heart, and Antonio would say the same, that this is a bit of a surprise, and this is the work we still have to do.
This is the challenge that we have to for next year. It's motor insurance. We've done a lot of work there on our premiums. You've seen our average premiums. In Spain, we've got an increase of 4% in units, and 1% in premiums. We have really improved our portfolio there. We have to have a growing portfolio. That's the only way to grow, to have more and more insurance policyholders, so that we can ensure we can cover them all their insurance needs there. That combined ratio, I think, has hedged a little. We've hedged a bit there with the average cost there, the losses.
In some cases we're above pre-pandemic levels, but there are some segments that we are below, still, in the frequency rate, the pre-pandemic levels. I think the biggest part is premiums. Let us do more on premiums because we've taken away the discounts now, and we have to update tariffs all over, in all geographies. 3% is the increase in Massachusetts, and that's been approved. We're exiting Florida, as you've heard from Antonio. There's a very small portfolio, but it's 19% there, and we will do an increase all over Latin America, because that's the reality. We have seen premium reductions to protect our portfolio. Now we have to put up the risk premium and adapt it to the context.
Thank you very much, Fernando. There's a question here from Philip Ross from Mediobanca. For MAPFRE RE and MAPFRE Global Risks, could you talk us through the January renewal campaign?
Yes. We have a double feeling there. As insurance company, as a reinsurance company, of course, for reinsurance, on the reinsurance side, without any rise that is not proportionate to the risk in each territory is complicated because it'll mean you can be less competitive. I understand that as a global risk or reinsurance, well, we're doing two things, aren't we? The January renewal process has been good. We're satisfied with MAPFRE RE, with the prices that have been attained overall. Perhaps we're slightly down, didn't reach the right level in some territories.
Overall, I would say, where there have been these Nat Cat events over the last three years, that the prices are the right ones. Given the circumstances of the market for MAPFRE RE, the whole process has been very demanding. The process of contracting its own protection against the catastrophic events for the client companies, there's been a lot of work done there because you're talking about double-digit increases in the prices for renewal of those coverages more linked to Nat Cat.
Thank you very much, Antonio. One more question on MAPFRE RE and on the business in Peru. That Repsol refinery, the leakage that might entail expenses there for losses, is this something to do with MAPFRE RE?
Yes. Repsol is a MAPFRE customer.
It has been a historical, historic one for us and MAPFRE Global Risks. Of course, we're together with them as they move into different markets. We are one of their key co-insurance companies. There will be expenses, yes. Repsol, it has a very broad protection plan for the geographical area that has been affected. For MAPFRE RE or MAPFRE Global Risks, in this case, we do not expect any relevant impact because as I said before, there is a retrocession with back to Repsol contractors. We're collaborating with them, of course. Of course, this is confidential client information. We can't disclose it, but they are doing everything they can in the region to minimize the impact. For MAPFRE, there will not be any impact.
There are no more questions, coming in remotely. Any more questions from anyone here in the room? If not, we can close.
We have received some questions through the platform that we feel we have already been answered through the Q&A. If any further clarification is necessary, do not hesitate to contact us later. Before we close this event, let me remind you some important events in this quarter's agenda. Remember that AGM will take place on March 11 on first call, providing there's sufficient quorum. There's a pleasure to announce our next investors day on March twenty-third, where we'll give you more color on the new strategic plan. More details about the agenda and logistics will be provided at later date. Please remember that you can contact the investor relations team at any time if you have any doubts about the full year results released today.
Thank you for your attention today and especially to those who have taken the time to come in person. Hopefully, we'll be able to see each other more often going forward. Have a nice day. Thank you very much.
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