The presidential elections in Brazil are not just a political event for Mapfre. The country has become one of the main sources of profits for the Spanish insurer outside its domestic market, so any significant movement in the Brazilian economy ends up reflecting in its accounts. Brazilians vote this Sunday, October 4 in the first round of a presidential election featuring the current president, Luiz Inácio Lula da Silva, and Senator Flávio Bolsonaro, with polls pointing to the possibility of a second round on October 25 if no candidate surpasses 50% of the valid votes.
For Mapfre, more than the specific name of the winner, it will matter how the markets interpret the economic program that ends up being applied and its effect on public accounts, inflation, the Brazilian real and interest rates. Lula has defended during the campaign a greater role for social policies and the State, while Bolsonaro proposes spending cuts and privatizations. Brazil also goes to the polls with a public debt exceeding 82% of GDP and fiscal sustainability as one of the major concerns of investors.
Brazil contributed 136 million to Mapfre in just six months
The importance of the Brazilian market is reflected in the company's latest results. Mapfre obtained in Brazil 136 million euros in net profit during the first half of 2026, 4.3% more than a year earlier, compared to the 624 million earned by the group as a whole. Brazilian premiums reached 2,249 million euros, 4.1% more in reported terms, and the return on equity stood at a high 25.1%.
The previous year had been even more significant. Brazil closed 2025 with a record profit of 268 million euros, 5.1% more, and an ROE of 27.6%. Premiums reached 4,320 million, although they fell 10% in euros due, in large part, to the depreciation of the real. In local currency, the decline was much smaller, at 3.5%. That contrast summarizes one of the main risks that Mapfre faces every time the political and financial climate changes in Brazil.
Why the real matters so much to Mapfre
Mapfre sells policies and collects premiums in reais, but presents its consolidated accounts in euros. This means that the evolution of the Brazilian business can be positive within the country and still seem worse when the figures are converted to the European currency if the real depreciates. The opposite also happens: a stronger Brazilian currency automatically increases the value in euros of premiums and results obtained in Brazil.
The results of 2025 offer a clear example. Mapfre attributed part of the 10% drop in Brazilian premiums expressed in euros to a depreciation of the real of 6.7%. In the first half of 2026, the opposite movement occurred: the company explained that its premiums in Brazil increased by 4.1% in euros thanks to the appreciation of the Brazilian currency, despite the fact that in reais the volume of business had decreased by 0.7%.
That is why a sharp market reaction after the elections can modify Mapfre's accounting image even before the number of policies sold changes significantly. A strong real benefits the conversion of Brazilian results to euros; a weak one does exactly the opposite. It does not necessarily imply that the underlying business is doing better or worse, but it can alter the figures that shareholders ultimately receive.
Interest rates have a double effect
The second fundamental variable is interest rates. The Central Bank of Brazil reduced the Selic rate in September by 25 basis points, to 13.75%, marking its fifth consecutive cut. Despite this easing, Brazil continues to have extraordinarily high rates compared to the main developed economies.
For Mapfre, this generates an apparently contradictory effect. On one hand, high rates harm certain insurance businesses. The company has acknowledged that they make credit more expensive and reduce the hiring of insurance linked to financing, which is particularly affecting the Agro and Life Risk sectors. When financing a car, agricultural machinery, or any other acquisition becomes more expensive, fewer loans are formalized and some associated policies also decrease.
On the other hand, the high interest rates favor one of the main sources of income for any insurer: the investment portfolio. Mapfre receives premiums from its clients before having to pay many of the claims and future commitments, and in the meantime invests a significant part of that money, mainly in fixed income. The higher the yield of bonds and other assets, the greater the financial result generated by that portfolio.
Mapfre has expressly pointed this out. In 2025, the financial result of its Non-Life business in Brazil increased by 12.1% thanks to the high interest rates, and during the first half of 2026 the company again highlighted that financial profitability continued to grow for that same reason.
High rates: less business, but more investment return
The situation explains why for Mapfre there is no simple answer to the question of whether a decrease in rates in Brazil is positive or negative. A gradual decline can stimulate credit, vehicle purchases, corporate investment, and the hiring of associated insurance, which is favorable for business growth. However, it also means that the new bonds purchased by the insurer will offer, over time, lower yields.
The final effect will depend on the speed of the movement. If rates fall because inflation is controlled, public accounts generate confidence, and the economy grows, Mapfre could offset lower financial profitability with more insurance activity. A rapid drop in rates accompanied by economic weakness or fiscal tension would pose a different scenario, especially if it also causes a depreciation of the real.
The Brazilian Central Bank is precisely in that equilibrium situation. After reducing the Selic to 13.75%, it has maintained a cautious discourse because inflation continues above the target and fiscal prospects remain a source of uncertainty.
The market watches public accounts after the elections
That is where the elections come back into the equation. Investors will pay attention to the first signs about public spending, taxes, deficit, debt, and relationship with the Central Bank. A deterioration of fiscal expectations may pressure the real and force high rates to be maintained for longer; an improvement in confidence could strengthen the currency and facilitate a more sustained monetary easing.
Brazil also has a particular sensitivity to rates. At the end of August, 52.7% of Brazilian public debt was linked to the Selic, a new recent high, which means that keeping the price of money high also increases the financing cost for the State itself.
This explains why the economic proposals of Lula and Bolsonaro are observed far beyond Brasília. Elections can change expectations about the deficit and debt, those expectations affect the real and Brazilian bonds, and ultimately, those movements reach the accounts of a Spanish multinational like Mapfre.
The technical profitability gives Mapfre an important cushion
The insurer does not depend exclusively on financial conditions. One of the current strengths of its Brazilian business is precisely its insurance profitability, that is, what it earns directly from premiums and claims before taking into account investments.
The combined ratio of Non-Life in Brazil stood at 73.8% during the first half of 2026. This indicator relates claims and expenses to premiums: the more it remains below 100%, the greater, in general terms, the technical margin of the insurer. General Insurance recorded an even lower ratio, of 65.7%, while Automobiles continued to be the most complicated area, with 102.4%.
This cushion allows Mapfre to face possible adverse movements of the currency or rates with greater strength. Brazil does not only provide high financial returns: its insurance activity is also among the most profitable in the group.
Brazil is already strategic for Mapfre in Latin America
The exhibition acquires even more importance because Mapfre has just become the largest insurer in Latin America by premium volume, with 11.044 billion dollars and a regional share of 5.1% during 2025, according to its research service. Brazil is a central piece of that position and also one of the markets that can most alter the regional figures due to the size of its economy and the volatility of the real.
That is why Mapfre will follow the elections this Sunday with a logic different from that of a party or a voter. The insurer does not only need to know who will govern Brazil, but what will happen afterwards with investor confidence, the real, inflation, the Selic, and credit. Those variables will decide how much their Brazilian profits will be worth in euros, how much they can earn from their investments, and how the insurance hiring will evolve.
Brazil has demonstrated in recent years that it can offer Mapfre an exceptional combination of technical and financial profitability. The elections now open a new period of uncertainty: if the real remains strong and interest rates decrease in an orderly manner, the group can benefit from a recovery in business without suddenly losing the performance of its portfolio; if fiscal doubts increase and the currency weakens, the translation of those profits into euros will again become a headwind.