2022 IN FIGURES

INCOME STATEMENT
SUMMARY

Written Premiums

During 2022, written premiums totaled Ps. 14,607 million, up 22.1% compared to Ps. 11,963 million in 2021, driven by the performance of Reaseguradora Patria (+27.2%), which continued to boost its market share in the markets where it operates, and General de Seguros (+22.9%), which continued to win new business and renewals thanks to the commercial area’s follow-up.

Net Increase of Unearned Premiums Reserve

The increase in the Reserve for Unearned Premiums was Ps.485 million in 2022 vs. Ps.696 million in 2021.

Net Acquisition Cost

Net acquisition cost increased 26.5%, from Ps. 2,857 million in 2021 to Ps. 3,615 million in 2022. This as a result of the increase in Reaseguradora Patria in this item due to the growth in commissions for reinsurance taken out paid to ceding companies and the higher costs of excess of loss coverage that protects the Company’s retention.

Net Claims Cost

Net Claims Cost increased from Ps. 5,169 million in 2021 to Ps. 6,747 million in 2022, representing an increase of 30.5%, which is explained by the increase in claims of both General de Seguros (+42.2%) and Reaseguradora Patria (+27.3%).

Technical Result

During 2022, technical income totaled Ps. 1,162 million, 6.9% higher than the Ps. 1,087 million obtained in 2021, mainly due to the higher premiums written during the period.

Other Technical Reserves

In 2022, the net increase in other technical reserves (mainly comprised of catastrophe reserves) was Ps. 1,096 million, 19.9% higher than the Ps. 914 million in 2021. This performance is mainly due to the higher origination of reserves in both divisions (insurance and reinsurance), following the increase in written premiums, highlighting the increase in catastrophic reserves in Reaseguradora Patria (+13.7%).

Operating Expenses

During 2022, operating expenses decreased 4.9%, from Ps.1,026 million in 2021 to Ps.976 million, thanks to greater administrative and operating efficiencies generated throughout the year.

Comprehensive Financing Result

During 2022, the Comprehensive Financing Result recorded a gain of Ps.58 million vs. the gain of Ps.1,352 million obtained in 2021. This result derives from the effects of the high volatility of the stock markets during the first months of the year, higher interest rates and the exchange rate, on the valuation of the Company’s investments.

Net Result

As a consequence of the high claims ratio recorded in the last quarter of 2022, as well as the performance of Grupo Peña Verde's investment portfolio within the equity markets (affected by geopolitical and macroeconomic issues), the result for fiscal year 2022 resulted in a net loss of Ps. 736 million compared to the net income of Ps. 430 million that the Company recorded in fiscal year 2021.

BALANCE
SHEET
SUMMARY

Investments

The Company’s investment balance increased 2.2%, from Ps. 20,618 million at the end of 2021 to Ps. 21,064 million at December 31, 2022, and consisted mainly of Ps. 13,996 million in government securities and Ps. 2,902 million in equity instruments.

During 2022, Grupo Peña Verde made progress in implementing a methodology that allows it to select investments based on social and environmental criteria, thus moving toward a more sustainable portfolio.

Cash

As of December 31, 2022, the cash balance was Ps. 141 million, compared to Ps. 176 million in the same period of 2021. This variation is in line with the Company’s strategy of directing resources to where they will generate the most value (in this case to investment accounts to obtain short-term returns).

It should be remembered that, due to the nature of Grupo Peña Verde’s business, this movement is not highly significant for the analysis as it could be for companies in other sectors.

Assets

As of December 31, 2022, assets amounted to Ps. 30,247 million, representing an increase of 4.5% compared to Ps. 28,935 million in the same period of 2021, which was mainly driven by a 37.7% increase in government securities, given the search for lower risk exposure in the Group’s consolidated portfolio, reducing equity positions and increasing investment in fixed income, in addition to a reduction in the duration of bonds.

Technical reserves

Technical reserves totaled Ps. 20,660 million at the end of 2022, growing 10.1% compared to the Ps. 18,769 million recorded at the end of 2021. This was mainly due to increases in the contingency reserve (+20.3%) and premiums on deposit (+62.7%).

Reinsurance and Rebonding

As a result of the growth in the business portfolio of both subsidiaries (Reaseguradora Patria and General de Seguros), the reinsurance and rebonding account totaled Ps. 3,800 million at the end of 2022, representing an increase of 20.2% compared to the same period of the previous year.

Liabilities

The Company’s liabilities increased from Ps. 24,082 million at the end of 2021 to Ps. 26,162 million at December 31, 2022, an increase of 8.6%, mainly due to the higher generation of technical reserves.

Shareholders’ Equity

At the end of 2022, shareholders’ equity decreased 15.8% vs. 2021, totaling Ps. 4,085 million, due to the net loss recorded during the year, as both divisions suffered from increases in post-pandemic claims, inflationary pressures, financial market volatility and higher interest rates.

Grupo Peña Verde’s acquisition ratio (measured as net acquisition cost over retained premiums) increased 97 bps. compared to 2021, standing at 30.1%, as net acquisition cost grew in greater proportion than retained premiums.

Grupo Peña Verde’s claim ratio (measured as net claims cost divided by retained earned premiums) increased 183 bps YoY to 58.6%, due to the increase in General de Seguros’ claims ratio.

As a result of the operating efficiencies generated throughout 2022, mainly in General de Seguros, as of December 31, 2022, Grupo Peña Verde’s Operating Expenses Ratio decreased by 189 bps. on an annual comparative basis to 6.7%.

At the end of 2022, Grupo Peña Verde’s Combined Ratio, which represents the sum of the previous 3 ratios, was 95.3%, an increase of 91 bps. compared to year-end 2021.

The adjusted combined ratio (measured as the sum of acquisition costs, claims and operating expenses over earned retained premiums) is presented for comparative purposes with international ratios. In 2022, Grupo Peña Verde’s adjusted combined ratio was 98.4% vs. 99.3% in 2021 (-94 bps.).