Mapfre keeps separated from its results account 336.9 million euros Due to the legal conflicts he maintains in Brazil through his subsidiary in the Carioca country.
The insurer accumulates that amount in which it is already its second most important region after Spain -4.8 billion income and benefit of 255 million- mainly due to a conflict that is already lengthened twenty years. This refers to the differences in interpretation of two existing taxes in Brazil: COFINS (Fiscal contribution aimed at social security financing) and the Pee (Social Integration Program). The origin of the contingencies is located in the different interpretation of the norm maintained by the Brazilian government and the insurance sector for the billing of the premiums. In total, Mapfre has 196.3 million For the Cofins Tribute and 31.9 million for Pis. With respect to the total provision for taxes, this was 239.4 million.
As a novelty, this cause, according to Mapfre, was judged by the Superior Federal Court (STF) unfavorably For insurers And now the insurer awaits the application of the final decision of the resources filed by the entity. However, Mapfre clarified to this medium that if the ruling is unfavorable “there will be no impact on the results accounts of Brazilian entities when provided.”
On the other hand, these taxes have also caused a Mapfre clash with the Brazilian tax administration “for the enforceability of both taxes related to financial and non -operational income.” This conflict, which MAPFRE values its affectation in 211.4 million, it is not provisioned by the insurerthat here is much more optimistic, since as recorded a judgment of the STF, it indicates that the financial income of the technical reserves of the insurers do not constitute billing. “This procedure offers much more favorable perspectives to Mapfre’s theses and this is the reason why no provision has been provided on this particular,” they explain. The entity and its advisors qualify the risk of loss of judgment as possible, and here it would affect the accounts since there was no provision.
Other resources
In addition to the above, Mapfre has two other processes open in Brazil. The first is a resource that challenges the settlement of the act initiated by the Tax Administration to Brazilsegthe Joint Venture That Mapfre maintains with Banco do Brazil where he has 25% of the capital. Here the insurer questions “the exemption applied to the income of agricultural insurance operations.” The litigation was lost in the first and second instanceand Mapfre presented an administrative appeal before the Superior Chamber of Fiscal Resources. Here the amount is 57 million.
Finally, Another conflict with the tax administration of 81 million for the absorption of the insurer Brazil vehicles by the Mapfre subsidiary in 2019, due to the deductibility of certain expenses and incentives to the commercial network, as well as the amortization of the trade fund generated in a corporate restructuring prior to the Mapfre agreement with Banco do Brazil. This debt, in case of unfavorable resolution, would only apply to Mapfre 50% by the compensation clause signed with the Brazilian bank, so the cost would be 40.5 million.
The spotlights in distribution
Mapfre concentrates its particular in Brazil HUB Technological, and with this it intends to find new distribution channels in the Carioca country and export them to the rest of the regions.
The insurer wants to improve their penetration especially in this country, which is already the second most important for the entity in terms of billing and in the contribution to the company’s result. Brazil is one of the most advanced countries in regulation related to innovation and is in a process of attracting a new talent for the creation of new startups. Specifically, recently the Brazilian government, through the Superintendency Insurance Regulator (SUSEP), He has created a Sandbox To evaluate the viability of new projects, as explained by Alessandro Octaviani, representative of the Brazilian organism.
Mapfre has about twenty agreements with Startups Brazilians, and has active projects with more than ten. Some of these are like that of the Shift company. This, within the accident automation area, has worked on an automation pilot project end-to-end With Ia in the processing of home insurance claims, allowing direct payment to the client in a single interaction after validation.
Another of them is with ControlExpert, which focuses on image automation. In this way, the milder accidents can be automatically permitted with photos such as the vehicle. This project is already being deployed for all insured, as confirmed by the company.
Brazil is the main country in terms of existence of startups, representing just over 40% of LATAM.
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