Report by Renta 4
Mapfre has reached an agreement, through its subsidiary Mapfre USA, to acquire 100 per cent of the share capital of Safety Insurance Group, a US non-life insurer.
Safety Insurance Group holds a leading position in Massachusetts and has a presence in other north-eastern states.
The transaction is valued at $1.542 million (€1.352 million), will be paid entirely in cash and implies a price-to-earnings ratio (P/E) of 10.5x (including cost synergies). Safety’s shareholders will receive $105 per share (approximately +44% compared with the closing price on 23 July).
The transaction is expected to close in Q1 2027 once all regulatory approvals have been obtained and the transaction has been approved by Safety’s shareholders.
To finance the transaction, Mapfre has entered into a temporary bridge financing agreement for a maximum amount of €1.36 billion. It is anticipated that the definitive financing for the transaction will be structured in the coming months through a combination of Tier 2 subordinated debt (US$700 million), senior debt (US$500 million) and bank financing. The impact on the Group’s leverage ratio is estimated at 7 percentage points.
The acquisition of Safety, based on figures as at December 2025, will double gross premiums written in the United States, increase net profit by >+70 per cent and boost total assets by >50 per cent.
Assessment:
This transaction will create the second-largest private motor insurer in New England, with undisputed leadership in Massachusetts, raising its market share to 25 per cent in motor insurance and 17 per cent in home insurance.
The acquisition is in line with Mapfre’s long-term strategy; it strengthens Mapfre USA’s leading position in Massachusetts, whilst also enabling a significant improvement in the Group’s profitability through the generation of >$30 million in annual cost synergies (before tax) and an expected increase in net profit of >+5% over three years.
Mapfre estimates an impact of 10 percentage points on the Solvency II ratio, meaning that the pro forma ratio for 1H26 would stand at 196.8%, remaining within the 175%–225% range established by the Board of Directors.
We are placing the recommendation and Target Price Under Review (Hold, previous Target Price €4.1 per share)
