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Company Registration Number: C 5553
MAPFRE MIDDLESEA p.l.c.
Annual Report
31 December 2025
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Contents

|  | Page |  | Page
| Chairman's Statement | i. | 6. Amounts determined in transition to IFRS 17 | 127
| President & Chief Executive Officer's Statement | v | 7. Segment information | 131
| Directors’ Report | 1 | 8. Investment return | 134
| Corporate Governance Statement | 8 | 9. Other income | 136
| Remuneration Statement and Report of the Remuneration Committee to the Shareholders | 29 | 10. Profit before tax | 136
| Statement of profit or loss | 40 | 11. Employee compensation | 137
| Statement of profit or loss and other comprehensive income | 41 | 12. Income tax expense | 137
| Statement of financial position | 42 | 13. Directors’ emoluments | 138
| Statement of changes in equity | 43 | 14. Earnings per share | 139
| Statement of cash flows | 47 | 15. Dividends | 139
| Notes to the financial statements | 48 | 16. Intangible assets | 140
| 1. Basis of preparation | 48 | 17. Leases | 142
| 2. Accounting policies | 49 | 18. Property, plant and equipment | 143
| 2.1 Consolidation | 49 | 19. Investment property | 147
| 2.2 Segment reporting | 51 | 20. Investment in subsidiary undertakings | 155
| 2.3 Foreign currency translation | 51 | 21. Investment in associated undertakings | 157
| 2.4 Intangible assets | 52 | 22. Other investments | 159
| 2.5 Property, plant and equipment | 52 | 23. Deferred income tax | 164
| 2.6 Investment property | 53 | 24. Insurance contract assets, insurance contract liabilities, reinsurance contract assets and reinsurance contract liabilities | 166
| 2.7 Investments in subsidiary undertakings | 54 | 24.1 Composition of statement of financial position | 166
| 2.8 Investments in associated undertakings | 55 | 24.2 Short-term insurance contracts under PAA model | 167
| 2.9 Financial instruments | 55 | 24.3 Long-term insurance contracts - Life risk | 176
| 2.10 Insurance and investment contracts issued and reinsurance contracts held | 63 | 24.4 Life risk - Reinsurance contracts held | 181
| 2.11 Current and deferred income tax | 86 | 24.5 Investment contracts with DPF | 185
| 2.12 Provisions for pension obligations | 87 | 24.6 Long term contracts - inputs assumptions and estimation techniques | 188
| 2.13 Revenue recognition | 87 | 25. Investment contract liabilities | 194
| 2.14 Investment return | 88 | 26. Trade and other receivables | 194
| 2.15 Leases | 89 | 27. Cash and cash equivalents | 195
| 2.16 Impairment of non-financial assets | 90 | 28. Share capital | 195
| 2.17 Offsetting | 91 | 29. Other reserves | 196
| 2.18 Dividend distribution | 91 | 30. Other p ayables | 198
| 2.19 Share capital | 91 | 31. Cash generated from operations | 199
| 3. Use of accounting estimates and judgements in applying accounting policies | 91 | 32. Commitments | 199
| 4. Management of risk |  | 33. Contingencies | 200
| 4.1 Insurance risk | 93 | 34. Related party transactions | 200
| 4.2 Financial risk | 102 | 35. Statutory information | 206
| 4.3 Fair values | 122 | Independent Auditors’ report | 207
| 5. Capital management | 126 |  |

i
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Chairman’s Statement
I have great pleasure in informing you that the MAPFFRE Malta Group has recorded the
highest profit in its history. This is coming on the back of three years of consistent growth in
total premium sales as well as net profit. There are a number of reasons for this including
closer alignment of the risks the Company underwrites to pricing which has improved our
loss ratio, a general reduction in losses in motor business, and an increase in premiums
written across the major lines of business.
To some extent this reflects the strong economic performance within the country with GDP
expected to increase by approximately 4% whilst the main economic pillars including
tourism, financial services, and gaming continuing to perform strongly. The labour market
remains very tight, which may impact growth, on the other hand population pressures and
increasing tourism numbers on the Island are having an impact on quality of life. Adjusted
population figures indicate that population is fast approaching 6 00,000. Other economic
indicators including Government deficit, inflation, public debt and unemployment indicate a
strong economy.
Internationally the outlook is less rosy and indeed more uncertain, and any adverse events can
impact our own economy. The United States new administration has implemented a radical,
and highly transactional approach to international politics, marking a departure from the post-
WWII international order. This is exacerbated by the continuing tragic war in Ukraine and
the conflict in Gaza and recently the instability in the Middle East, which continue to create
global tension. The use of tariffs for political persuasion, and the turmoil within NATO and
the EU with United States point to a continuing uncertainty. These dynamics create
uncertainty around energy prices, supply chains, and trade policy, influencing inflation and
central bank decisions. In this environment, diversification across regions and asset classes,
along with exposure to defensive sectors and liquidity buffers, remains essential. In the
specific case of MAPFRE MSV Life p.l.c., the With-Profits portfolio, is well diversified and
structured to meet these challenges as far as possible while capturing selective opportunities
arising from geopolitical shifts. At present no pressures have been identified that would
challenge the Group's capital or liquidity adequacy, business continuity, and cyber threats due
to such heightened geopolitical risks.
In these last years we have lived through almost continuous upheave with Financial Crises,
Covid and now political crises and must continue to manage in a world increasingly fraught
with uncertainty. To MAPFRE as insurers we must add climate risk as a specific risk
affecting our industry.
MAPFRE operation in Malta
The Group results comprise of MAPFRE Middlesea p.l.c. (“MAPFRE Middlesea”, “MMS”
or “Company”), which is principally a General Insurance company (writing mainly Motor,
Health, Home, Travel, Hull and others (including a small element of Group Life). MAPFRE
Middlesea also has a 50% interest in MAPFRE MSV Life p.l.c. (“MAPFRE MSV Life”,
“MMSV”), which is a Life and Savings Investment company – the other 50% being owned
by our partner Bank of Valletta p.l.c.. Other Group companies include the subsidiary BEE
Insurance Management Limited and the associate Middlesea Assist Limited. whose positive
results, though not material, contribute to these financial statements.
ii
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Chairman’s Statement - continued
Results
Both MMS and MMSV have delivered a satisfactory result exceeding set targets delivering to
the Group an improved result on the already significant 2023 and 2024 result. The Group’s
€29.6 million profit before tax represents a healthy pre-tax return on equity of 15.5%. The
Statement of Financial Position remains strong and our liquidity and solvency ratios remain
well above the minimums required reflecting the groups cautious approach to risk.
Dividends
MAPFRE Midd lesea is declaring a net dividend of €6.0 million ( 2024 €4.8 million) out of
the net attributable profit after tax of €11.6 million. This translates into a n et dividend per
share of €0.065217. During the year we received a net dividend of €1.5 million from
MAPFRE MSV Life which is an increase of 50% over last year. Although MAPFRE MSV
Life has a high solvency ratio, the Board of Directors maintain a defensive dividend policy.
The profits retained at MAPFRE MSV Life remain part of the shareholders' funds.
Corporate Social Responsibility
In 2025, MAPFRE Malta successfully achieved its CSR goals by partnering with various
entities to organize numerous activities, including food and blood donations, environmental
initiatives, and contributions to several charitable organizations and NGOs.
The local commitment of Fundación MAPFRE, which in 2025 celebrated its 50th anniversary
continued unabated. A number of local projects continue to be supported by the foundation
such as the "Street Smart Campaign”, Doctors For Road Safety (D4RS), and the "Logging
Off" initiative. Furthermore, the Foundation also provided its support in respect to the launch
of a pensions guide in Malta. This guide, which was rolled out digitally aims to educate on
the importance of starting to save for retirement as early as possible.
Change of Name
In the forthcoming Annual General Meeting you will have before you a resolution to change
the name of the company from MAPFRE Middlesea to MAPFRE Malta. The name
Middlesea has served us well and has been part of the name of this company since inception.
A change of name is not something the board of directors undertakes lightly. We do see clear
tangible benefits in aligning our name with the larger global brand of MAPFRE - this in
marketing, recognizability, profile as well as image. We therefore cast aside nostalgia and
perhaps affection, for a harder nosed business calculation. You will note that this coincided
with a new branding at MAPFRE Group level and therefore the opportunity had to be seized
at this time. I do hope you are as pleased with the rebrand as your Board of Directors is.
iii
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Chairman’s Statement - continued
Governance
The world of insurance is increasingly complex and remains highly regulated. The Board of
Directors is determined to maintain the highest levels of compliance with the welter of new
regulations, accounting standards, and codes of practice which we have had to implement in
recent years. We maintain an open relationship with our regulators; the MFSA, FIAU and
Sanctions Board, as well as the Listing Authority and we have ensured that our Risk and
Compliance functions are adequately resourced to meet our obligations. This comes at some
cost and I do believe that whilst we do believe in strong regulation, we also believe this
should be tailored to ensure that operators comply with the law, as well as the spirit of the
law, and enforcement, and inspections carefully targeted to capture the bad players.
I can report that the Board meets regularly and is supported by board committees for Risk
and Compliance, Audit, and Remuneration as well as receiving technical support from
MAPFRE S.A. This allows the board to set strategy, challenge management, and ensure
adherence with the highest standards of the group, relevant regulation and best practice.
Distribution
The business relies heavily on a network of 6 agents, around 60 Tied Insurance
Intermediaries, and brokers to generate the majority of its insurance premium, with only 10%
of business written directly. Beyond providing insurance coverage, the company focuses on
supporting its intermediaries with products, and technical support and ensuring as far as
possible competitive pricing. Whilst we commit to continue provide an improved service, the
Board of Directors would wish to recognize the efforts of our agents and tied intermediaries,
as well as brokers, in achieving the excellent results we enjoy this year, as well as for
providing an excellent service to our ultimate customers.
It is pertinent to mention Bank of Valletta which is the largest producer for MAPFRE MSV
Life, particularly for investment products and term assurance. The partnership can be
described as crucial to the company's results and has proven successful for both shareholders
and customers.
Digital Transformation
Whilst we can, I believe justifiably record our achievements, we must also record where we
have not. Our digital transformation at MAPFRE Middlesea has not been completed as
planned and target moved to 2026 with considerable expertise and resources from MAPFRE
S.A. to ensure we get over the line by mid this year. It is yet another example of the benefit of
forming part of a large international group.
On the other hand I am pleased to report that at MAPFRE MSV Life we have achieved live
status in the new digital platform introduced there.
iv
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Chairman’s Statement - continued
Directors and shareholders
MAPFRE Middlesea p.l.c. is a listed entity regulated by the Malta Financial Services
Authority. It is a subsidiary of MAPFRE Internacional S.A.. Being part of one of the largest
insurance companies in the world allows us to access technical knowhow and expertise which
is at the cutting edge of the industry. It has allowed us to develop the business to the latest
standards by providing relevant support in all sectors. MAPFRE Internacional S.A. has a
shareholding of 55.83% in the Company.
Bank of Valletta p.l.c. is the other major corporate shareholder with 31.08% of the
shareholding and is a 50% co-shareholder in MAPFRE MSV Life p.l.c.. The bank has proved
to be a steady partner throughout the years, providing input and insight at board level and the
relationship remains strong. 13.09% of the shareholding in MAPFRE Middlesea is held by
the so-called smaller shareholders, of which we have some 3,700.
I have the privilege to work with a dedicated board of professionals who have provided
direction and support to the Company’s executives. Javier Moreno, Jose Maria del Pozo,
Etienne Sciberras and Elvira López de Lara Merida who represented the MAPFRE
shareholding. Gordon Cordina, who is the chair at Bank of Valletta, and Godfrey Swain were
appointed by Bank of Valletta. The smaller shareholders elected Antoinette Caruana and Paul
Testaferrata Moroni Viani. I work with a board which has a full range of skills, and
intellectual capability to grapple with the tasks before it. To all of them I am very grateful for
their contribution and support.
During the year Eduardo Perez de Lema, CEO International Insurance at MAPFRE S.A., and
Jose Luis Jimenez, resigned due to their increased work commitments at the highest echelons
within the MAPFRE group in Madrid. I must place on record my own personal thanks as well
as that of the board for their important contribution to the board. I am happy to report
however that their connection with MAPFRE Malta remains due to our interactions with the
MAPFRE Group.
I must also mention the retirement of Joseph FX Zahra from the board of MAPFRE MSV
Life. Mr Zahra was a director connected with the MAPFRE Malta group for 28 years
including during the most turbulent times. His erudite contributions will be missed.
Etienne Sciberras, as Malta and MAPFRE Middlesea CEO as well as Elvira López de Lara
Merida, CEO of MAPFRE MSV Life, who have ably led and inspired our team of dedicated
professionals including Chief officers, managers, and all staff who form part of this group of
companies, together with the board I salute their hard work and achievement.
Signed by Martin Galea (Chairman) on 24 March 2026
v
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
President & Chief Executive Officer’s Statement
MAPFRE Middlesea Group highlights
It is with great pleasure that I am reporting to you the highest ever consolidated profit figure
for the MAPFRE Group in Malta ("Group"). In 2025, we have registered an extraordinary
performance across the local group operation. We have managed to exceed the already
excellent 2024 performance. This result was possible as both MAPFRE Middlesea p.l.c.
(“MAPFRE Middlesea”, “MMS”, “Company”) and MAPFRE MSV Life p.l.c. ("MAPFRE
MSV Life", "MMSV") registered an excellent financial performance over the reporting
period.
Therefore, I would like to start by thanking and acknowledging the work and contribution of
our staff, our Tied Insurance Intermediaries, our Agents and our strategic partners for such an
outstanding performance. I am also grateful for the various brokers who place their business
with us. Finally, I cannot fail to mention my fellow Board members and various members of
our governance bodies for their guidance, challenge and support.
The year 2025 marks the mid-point in our current three-year Strategic Plan. The execution of
this plan is progressing well. The key performance indicators set have been achieved.
The Political and Economic Context
The political context remained a complex and uncertain one. Never have we witnessed such a
seismic shift within a relatively short time span in US government policy. Transatlantic
relations between the US and European countries have come under considerable strain. Many
countries have been hit by the imposition of tariffs by the US. The US stance towards NATO
and climate change brought about a recognition that the EU needs to stand on its own feet. In
this climate, global growth has remained modest. The US maintained a relative strong
momentum, but China’s growth moderated compared to the pre-pandemic period while
growth in Europe was modest. On the positive side, inflation broadly continued to decline.
This enabled Central Banks to continue to normalize interest rates.
Global financial markets experienced another volatile year. The initial concerns of the impact
on inflation and global growth induced by the roll out higher tariffs by the US administration
resulted in a steep fall in developed markets equities. However, these concerns were later on
during the year shrugged aside as the markets focused on the positive implications of fiscal
and monetary stimulus. Artificial intelligence (AI) remained the dominant theme driving US
equities. Sectors mostly exposed to this theme outperformed the broader market returns. In
general fixed income delivered low but positive returns. For European investors, the
weakening dollar lowered investment returns from dollar denominated investments.
The local economy continued to register one of the strongest economic growth rates in the
European Union. While inflation remained aligned with European averages, unemployment
remained well below the European averages. The fiscal situation continued to improve with
the deficit ratio converging towards the EU threshold. Public debt moved below 50% of
GDP, below the EU average and the Maastricht 60% guideline.
This sustained positive economic activity continues to spur the demand for various insurance
products.
vi
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
President & Chief Executive Officer’s Statement - continued
Group Financial Performance
The total business written has been €323.5 million (2024: €309.5 million). Both MAPFRE
Middlesea and MAPFRE MSV Life registered year-on-year increases in terms of total
business written. MAPFRE Middlesea registered growth in gross premium earned across all
its classes of business.
The consolidated MAPFRE Group's result in Malta for the year under review have been
excellent with a pre-tax profit of €29.6 million. The reported profitability is significantly
above last year reported figure of €24.8 million. This equates to Earnings per share o f 16c2
(2024: 13c6) an incre ase of 19.3% over 2024 c orresponding figure.
The Premium written figure for MAPFRE Middlesea including group life reached a total of
€113.6 million at the end of 2025, representing an increase of 9.6% over 2024. MMS
registered a profit before tax of €16.9 million. This is 60.2% above the 2024 reported
profitability. Profit after tax was equal to €11.6 million compared to previous year’s figure of
€7.1 million. This exponential increase in reported profitability was underpinned by
significantly better technical and financial performance. Furthermore, these results reflect a
higher dividend from Group companies, primarily from MMSV.
The insurance service results saw a significant improvement from previous year, driven by an
improvement in the non-life net combined ratio which has moved to 82.3% compared to
86.4%. The main lines of business continued to perform well, particularly motor. While this
result is testament to a prudent underwriting approach, robust risk management, cost
discipline and rigorous claims management process, it is recognized that the significantly
lower than expected frequency of motor claims experienced in 2025 is unlikely to be
sustained at the same levels, in the near future.
Regarding the long-term business, while a notable improvement was registered in business
written, the competitive landscape remains challenging. Key figures of MMSV's results are
disclosed in a specific section within this report.
General Business
Premium Written in 2025 r eached €111.1 million, representing an increase of 9.2% over
2024. This represents an all-time high in premium written. Premium growth was achieved
across all the lines of business.
In our comparison with the rest of the market, we maintained a clear leadership position with
a market sh are of 31.9% in 2025, which is a slight increase from the 31.6% we had in 2024.
We maintain proportionate leadership in most business lines.
Our business model caters for various insurance needs covering commercial and personal
segments. Personal lines remain our core business. Motor, health and Fire and property
damage remain the main classes of business written. Together these three lines of business
represent ove r 83.5% o f the gross written premium.
The overall non-life net Combined Ratio (COR) which is the key performance indicator in
our business closed at a positiv e 82.3% a satisfactory improvement on the already very
positive 86.4% registered a year earlier.
vii
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
President & Chief Executive Officer’s Statement - continued
General Business - continued
The main contributor to the improved combined ratio was the motor class of business. The
performance of the Motor business portfolio weighs heavily on the overall financial
performance of our company. This is a direct consequence of motor representing 45.2% of
the non-life portfolio. The already very positive evolution registered in 2024, for this line of
business, was sustained and improved upon in 2025. The motor portfolio registered a
significantly better performance than its long-term average. The motor net combined ratio in
2025 was 83.0%, a further improvement on the 85.0% reported in 2024. In the main this was
the result of the disciplined underwriting approach applied and a lower claims frequency.
Particularly the latter left a significant positive impact compared to normal long-term
experience. As can be appreciated, some of these factors are not within the company’s
control. Having said this, a sound motor portfolio remains critical for the sustained
profitability of our company. Therefore, in line with our strategy, data remains a key enabler.
Improving data quality and analysis capabilities to better quantify and price risk remains high
on our strategic priorities.
On the other hand, the Health business and other classes of business registered an
improvement in the net combined ratio compared to the previous year from 89.8% and 87.1%
to 89.1% and 73.4% respectively. The health portfolio saw a marginal improvement in loss
ratio. Other lines of business also registered a positive evolution compared with previous
year. All other lines of business, with exception made for travel, closed the year with a net
combined ratio below 100%. The most notable positive development was registered in
Marine hull, which in 2024 had the worse net combined ratio compared to the other lines of
business.
These results highlight reflect a positive commercial and extraordinary technical performance
during the reporting period. The company’s business model remains well diversified across
lines of business and sources of business generation. Our risk appetite remains tilted on the
conservative side with a reinsurance program reviewed and approved by the Board of
Directors on a yearly basis. This allows us to mitigate negative movements in specific asset
classes and hence mitigate the volatility in our statement of financial position.
Finance Income
Investment income was €4.8 million an increase over the €2.6 million reported in the
previous period. While the return from the investment portfolio was lower than in 2024, the
higher dividends from Group companies more than offset this reduction.
Long Term Business
MAPFRE MSV Life offers a wide range of protection, savings, investments and retirement
solutions addressing the diverse needs of individual clients, companies as well as other
organisations.
viii
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
President & Chief Executive Officer’s Statement - continued
Long Term Business - continued
Total business written for financial year 2025 totaled €209.9 million, representing an increase
of 2% compared to the previous year-end close of €205.8 million. Single premium business
was marginally better than 2024 as demand for With-profits business improved. Regular
premium business continued to perform well, supported by strong demand for life protection
products and sustained pension business.
MAPFRE MSV Life registered a profit before tax of €15.7 million for the year ended
31 December 2025, compared to a profit of €15.0 million registered for the previous year.
Profit after tax is at €11.2 million, compared to a €11.0 million for the previous year. These
results are underpinned by a positive contribution both from the insurance activities and
financial income.
This business performance is influenced by both internal and external factors. The internal
factors are those normally considered within management control. These depend on the
business model of the company, its strategy and effective and efficient execution. On the
other hand, the external factors include the health of the local economy, the performance of
global capital markets and Central banks’ monetary policy. These elements influence the
demand and purchasing capacity of the consumer, the investors’ appetite and sentiment and
the competitive landscape.
In terms of the insurance activities, the release of the Contractual Service Margin (CSM)
remains the main determinant of reported profitability. Most of the release in CSM relates to
business written in prior years. New profitable business being written adds to the stock of
CSM for future release. Thus, normally, in life insurance, as long as business written is
profitable, a lower volatility in insurance performance from one year to the next is observed.
During 2025, the CSM release represented €12.4 million (2024: €10.8 million).
Net claims incurred decreased to €226.1 million through the year compared to a prior year
€249.0 million, largely as a result of a decline in maturing contracts. A proportion of these
maturing contracts were subsequently re-invested in new medium to long-term contracts.
Total assets increased by 1.1% to €2,384.0 million by the end of 2025.
Total shareholders’ funds at the close of 2025 amounted to €182.5 million (2024: €174.3
million), an increase of 4.7% over the previous year.
The MMSV With-Profits fund Assets Under management remained practically at the same
level when compared to previous year. The MMSV With-Profits fund closed at €1.84 billion
as at 31 December 2025 (2024: €1.86 billion). Over the past year, we continued to see
increased debt issuance, particularly in Malta Government stock issues. These heightened
debt issuances coupled with time deposits continue to compete directly with the With-Profits
product offering.
The With-Profits Fund registered a total investment gain of €78.5 million generating a
positive return of 4.3%%. The investment return was similar to 2024, which had amounted to
€79.7 million.
ix
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
President & Chief Executive Officer’s Statement - continued
Long Term Business - continued
Financial markets dealt with many cross currents in 2025. The first half of the year was
dominated by trade concerns as the US raised tariff rates. Developed market equities fell in
early April but ultimately shrugged off the impact. In the second half of the year markets
focused on the positive implications of fiscal and monetary stimulus. Risk-on sentiment
drove an “everything rally,” and 2025 was the first year since the pandemic where all major
asset classes delivered positive returns. Emerging markets were the top-performing equity
market in 2025. Gold dominated the headlines as international central banks continued to
diversify their reserve holdings and gold exchange-traded funds saw strong inflows, however,
silver outperformed. Strong performance from precious metals offset falling oil prices, lifting
overall commodities returns in 2025. Fixed income however, underperformed other asset
classes as fiscal concerns continued to weigh on government bonds and curves steepened in
all major markets.
The investment strategy of the MMSV’s With-Profits fund is to hold a diversified range of
quality assets, spread across different geographies and currencies to mitigate market and
concentration risk. This asset diversification together with the robust investment management
process, the expertise of the asset managers engaged, and the Company’s track record of
investment management continue to be fundamental in managing policyholders’ assets in this
challenging and ever more volatile investments market environment. Notwithstanding the
prudent investment policy adopted by MAPFRE MSV Life, past performance remains no
guarantee of future results.
Statement of Financial Position
The G roup's total assets increased by 1.5% and totaled €2.5 billion at year end. MAPFRE
Middlesea's total assets increased by 5.2% from €173.3 million in 2024 to €182.4 million by
end of December 2025.
On the liabilities side, 98.1% of the balance pertains to Insurance, investment and reinsurance
contracts liabilities. MMSV’s Insurance contract liabilities decreased as With-profits policy
maturities outweighed new fund flows into the With-Profits fund. Investment contract
liabilities continued to increase as further unit linked products were issued in the year under
review. MMS’s insurance contracts liabilities increased by 3.8% compared to the previous
year reflecting mainly the increased business written.
Total equity increased by €14.7 million or 8.0% including the minority with the profit for the
year partly mitigated by the dividends paid.
x
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
President & Chief Executive Officer’s Statement - continued
Strategic Plan 2024-2026 (previously 2025-2027)
During 2025, Management sought and obtained Board approval to reset and align the period
of its strategic plan to 2024-2026. The rational for this recommendation was twofold. On the
one hand the realization that the political, economic and technological landscape has evolved
significantly and secondly this reset will align the MAPFRE Group in Malta to the MAPFRE
SA strategic cycle. Thus, we can benefit from the roll out of MAPFRE Group wide projects,
their execution and be in sync with respect to the global strategic plan for the forthcoming
strategic cycle.
The current strategic plan is based on the four strategic Pillars outlined below. These are
supported by a number of transversal enablers.
Profitable growth
The level of execution of the various initiatives and projects falling under this pillar has been
good. The main Key performance indicators (KPIs) have been met and exceeded. We have
delivered on our growth, profitability and return on equity targets while maintaining a strong
solvency position. Our growth strategy has a two-pronged approach. Growing in those
segments where there is a market need which can be served in a technically sound manner
while at the same time adjusting the overall risk of our portfolio closer to our risk appetite.
On the other hand, managing the rate of growth in those risk sectors where technical
profitability is challenging or risk exposure is not adequately compensated by the market.
It is extremely positive to note that MMS registered year on year growth across all lines of
business and across all distribution channels. All our distribution channels had an excellent
performance in 2025.
Our direct business, consisting of our regional offices and TIIs performed well. As a
Company, we believe this channel has further growth potential and acts as a perfect
complement to the other channels. During 2025, the execution of the direct channel plan
moved according to the established milestones. We have undergone a review of our human
capital capabilities and recruited various new profiles to augment the teams’ skills set while
also continued to invest in upskilling our front liners. The company has a very comprehensive
training program for its distribution channel not only to meet the continuous professional
development requirements but also to equip our people with the necessary knowledge to
better serve the needs of our customers.
The agents’ network has increased premium in high single digits. Here, I would like to thank
all our agents with a special mention to the consistent and excellent performance achieved by
Laferla Insurance Agency, our trusted strategic partner for many years.
We firmly believe that our customers expect us to be as accessible as possible. We are
cognizant that different clients have different preferences on when and how they interact with
us. With four regional offices, a large network of TIIs and six agencies, we believe that we
are well positioned to deliver on this objective. Nonetheless, we have revisited opening hours
at our regional offices to offer increased convenience to our clients. Furthermore, our clients
also benefit from our increasing digital services through MyInsurance and our website.
xi
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
President & Chief Executive Officer’s Statement - continued
Profitable growth - continued
MAPFRE Middlesea remains the local insurer of choice for thousands of clients. Our
customer base has exceeded 130,000 with more than 250,000 policies in force. Our purpose
is to care for what matters to our clients and so be by their side. This commitment is
crystallized by the amount of claims we paid in 2025 which has reached €42.5 million. The
Life company’s corresponding numbers are equally impressive. Our market share figures
have remained consistent over the last two years.
The strategic priority to grow profitability can only be achieved with robust cost
management. Our management team did a great job in mitigating the inflationary pressures
on costs. We have a well-established budgeting and monitoring process across all
organization. This is fundamental in a highly competitive market and to deliver value for
money to customers. We must note that the regulatory and compliance cost have increased
significantly over the past years as new regulations came on board. We understand and
appreciate the importance of a robust consumer protection and prudential regulatory
framework, however as ex ECB president, Mr Mario Draghi well highlights in his report,
Europe needs to take measures to remain competitive with legislative simplification being
one of them. We do not need more regulation but more effective regulation.
MAPFRE Middlesea, as a subsidiary of MAPFRE International and part of the global
MAPFRE Group has direct access to group resources, network and expertise. This means
that we are better able to serve clients’ insurance needs.
Finally, we would like to note, the long overdue positive development whereby the banks are
no longer prohibited from offering general insurance cover to its clients. Though still limited
to home, health and travel, undoubtedly, this is a first step in the right direction. We are
convinced that in the medium term this channel should be contributing to our growth and
help to improve the underinsured reality in the local market.
Productivity and Efficiency
Under this pillar, our focus is to lay the foundations for future proofing our business while
capitalizing on tactical initiatives that can deliver immediate rewards. Key to the future
proofing of our operations in Malta has been the implementation of the core systems. We
have achieved good progress in the implementation of our non-life core policy administration
system, albeit not to the extent desired. Today, all new business, except for two products can
be issued from our new general insurance system. Once this implementation is fully
completed an immediate benefit will accrue as the managing of two core systems is removed.
Furthermore, on the Life core system implementation, we have even better news. This
system has been successfully implemented and now we can look forward to the next phase of
the digitalization plan.
In the past years, we have invested in growing internal capabilities in process management, a
digital and a data governance teams. These teams together with the relevant business and
informational technological area have contributed towards the introduction of robotic process
automation (RPA), operational workflows, management information dashboards and
customer servicing chatbots. We have also embraced general AI technology which has been
rolled out by market vendors like Microsoft. As MAPFRE, we also benefit from our own
developed AI space called MAPFRE C hatGPT.
xii
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
President & Chief Executive Officer’s Statement - continued
Productivity and Efficiency - continued
A key project under this pillar is the data quality project. Data quality is fundamental for any
organization to reap any benefits from AI models. Therefore, this project focuses on
improving the data quality within our data universe, which is key for success of future AI
initiatives.
Another driver for enhanced productivity has been the roll out of collaboration spaces.
Through this initiative our people can work in a smart, real time way thus improving quality,
turnaround time and fostering an environment more conducive to innovation.
On the IT infrastructure side, we have progressed well in consolidating most of our assets
through migration to Group and on the cloud. This will derive various benefits including
improved resiliency, monitoring but also software deployment.
Transformation and Culture
The competitive landscape is changing at a pace as never seen before. Artificial Intelligence
(AI) is being described as the engine of the fourth industrial revolution. A fourth industrial
revolution also characterized by advanced robotics, internet of things (IoT) and quantum
computing. Furthermore, consumer expectations have also evolved reflecting the overall
changes experienced in the broader society and wider consumer markets.
We want to transform because we want to have a more customer centric approach, an agile
and data driven company. To achieve this goal, we have identified a number of
transformation levers with clear key performance indicators to track progress.
Our Net Promotor Score (NPS) score is good, but we aspire to do better. We have mapped
our customer journey and know what needs to be done. We are convinced that once we
execute our plans the end result will be the desired one. The focus of these plans are on
delivering the customer experience.
There are many elements contributing to an agile company. We have restructured our
Business Development and Commercial areas to provide a leaner, more cohesive and focused
approach across MAPFRE Middlesea and MAPFRE MSV. We continue to look after our
talent by building on our leadership program. The growth of our professional workforce
through empowerment and knowledge remains the key for a more dynamic and agile
company. We have also started a renewal process leading to a number of changes in our
leadership team.
To become a truly data driven company, the first step is to make sure of the quality of the
data. To this effect, a data quality project has been launched. This project is coordinated by
the MAPFRE Group corporate area.
The importance of culture is reflected in it being one of the strategic priorities. The
combination of transformation and culture is based on our understanding that transformation
to be successful needs to be supported by a strong organizational culture. Long lasting
success can only be achieved if the company’s culture is a healthy one. To this effect, within
the MAPFRE Group, a culture reactivation plan has been launched. Our culture is based on
our vision, purpose and values. Our vision is to be our clients trusted insurance company,
xiii
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
President & Chief Executive Officer’s Statement - continued
Transformation and Culture - continued
with a stated purpose that “we care about what matters to you”. This requires that our people
embody the five core value that make MAPFRE a unique organization.
Sustainability
Our objectives under this pillar are being achieved. Our leadership team composition is very
well balanced in terms of gender. Females make up 40% of our Chief Officer roles and 52%
of our Unit Heads. The majority of our workforce is female. The gender pay gap is almost
nonexistent but well within the narrow tolerance margin set. We are very proud of the NCPE
award achieved. The same applies for two other recognition received during the year. The
FHRD HR Quality mark and the Malta Business award for Exceptional wellbeing at the
workplace. These recognitions are testament to our beliefs and how we bring to life what we
believe in.
On the investment side, more than 80% of our investments are being rated based on ESG
criteria. This is below the MAPFRE Group target. The reason for this is that no ESG rating is
available for local issued assets.
Finally, we are proud to share that following a number of initiatives to reduce our carbon
footprint, we have also taken the step to invest in carbon credits to offset our CO2 emissions.
Thus, as from 2025, MAPFRE MMS and MAPFRE MSV have become carbon neutral. This
was achieved ahead of schedule.
Capital Management
A sustainable profitable business enables us to generate internal capital for investment
purposes and to finance business growth. A prudent but consistent dividend policy is also key
in ensuring adequate capital resources. This together with the underwriting, investment and
risk management policy shape to a great degree the risk profile of the Company. Within the
risk management tool kit, the reinsurance aspect continues to be one of the main levers in
maintaining the Company risk profile within the established risk appetite. This means that
during normal years we forego a certain level of profitability to ensure we are better protected
in case of less frequent but more severe events or what we refer to as catastrophic events. The
risk profile and solvency position of an insurance company is measured by the solvency ratio.
Once again, the company continues to maintain a solvency ratio significantly above the
regulatory requirements.
Dividend Recommendation
The board of directors will be proposing for shareholders’ approval the payment of a net
dividend of € 0.065217 per share. The Company's payout will be 51.8% of this year’s profit
after tax of the Company.
While the Board of Directors is committed to provide an adequate return to its shareholders
on their invested capital, the dividend recommendation makes consideration of the future
capital needs of the C ompany and the need to maintain sufficient capital buffers to be able to
withstand any negative market shocks.
xiv
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
President & Chief Executive Officer’s Statement - continued
Our Contribution to our community
We understand that we have a social responsibility towards the society we form part of. As a
GROUP we are committed to bring about positive change and to support the advancement of
our society. During the year, we supported various organizations in their respective mission.
Sometimes this support takes the form of financial assistance, to making our premises
available to upcoming artists or educational events. We are very proud that through our
initiatives we manage to reach many noble causes ranging from philanthropy to arts, culture,
education and the environment. However, I would like to make a special mention to the
volunteering activities our staff and their families participated in during the year. In 2025, we
had 139 participants across 17 activities. For this I am very grateful and thankful. This is also
a reflection of the values we embrace at MAPFRE.
The local commitment of Fundación MAPFRE, which in 2025 celebrated its 50 th anniversary
continued unabated. A number of local projects continue to be support by the foundation such
as the "Street Smart Campaign”, Doctors For Road Safety (D4RS). and the "Logging Off"
initiative. Furthermore, the Foundation also provided its support in respect to the launch of a
pensions guide in Malta. This guide, which was rolled out digitally aims to educate on the
importance of starting to save for retirement as early as possible. Finally, I would also like to
mention that MAPFRE MMS and MAPFRE MSV, in collaboration with the BOV foundation
and Heritage Malta brought to Malta an incredible collection of works of art. The exhibition
held in the Grand Master Palace, in Valletta, at the end of last year and beginning of January,
titled “The Disasters of War” by Francisco Goya was only made possible by the generosity of
Fundacion MAPFRE which made its collection available to the public for viewing. Over 50
thousand viewers had the opportunity to admire and enjoy this impressive collection.
Looking forward
The global geopolitical situation remains highly concerning. The war between Russia and
Ukraine is now in its 5 th year, with the war between Israel and Hamas still ongoing and the
recent attack of the US and Israel on Iran. On top of the tragic loss of human life, these events
bring about significant global economic and financial uncertainties. While the ramifications
of the latest conflict in the Middle East is, at time of writing, still unfolding, the stability of
global financial systems becomes even more important. Our cautious approach in terms of
capital management, with a focus on strengthening and diversifying our statement of
financial position gives us the resiliency and confidence to navigate these challenging times
and seize opportunities as they arise.
Apart from the global context, locally, the start of the year was characterized by Storm Harry.
The island was badly struck, particularly in the coastal areas. From the company’s financial
perspective this was a setback, but its impact relatively contained thanks to our prudent risk
management approach as expressed through the reinsurance program in place. However, such
events do remind us that the nature of our business requires prudence in capital management
with rigor and discipline in underwriting and pricing of risks.
xv
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
President & Chief Executive Officer’s Statement - continued
Looking forward - continued
However, during the initial months of the year we have already achieved a number of
exciting milestones. Our global rebranding has been a great success. We are extremely proud
of our global brand, an important asset. We believe that this new modern image is more
attuned with the MAPFRE of today. A MAPFRE which over the years has significantly
transformed itself but remained true to the strong values it believes in.
Over the past years, the MAPFRE Group in Malta has consistently delivered positive results
even in the context of a challenging economic and financial environment. This is testament to
a well-defined and executed strategy. Over the past years, we have built solid foundations
upon which we can look at the medium to longer term with optimism. To better align with
the GROUP strategic cycle and to leverage on the tremendous technological changes the
world has been experiencing over the past years, we have decided to reset the strategic plan
during 2026.
Later this year, management will present to the Board of Directors a new strategic Plan for
the period 2027-2029. Our vision is clear and our ambition unwavered. Our new Strategic
Plan will remain inspired by the vision, purpose and values that distinguish us. This will be a
period of further organizational and digital transformation, key enablers in the shareholders’
value creation process.
Signed by Etienne Sciberras (President & CEO) on 24 March 2026
1
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Directors’ Report
The Directors present their annual report for the year ended 31 December 2025.
Principal activities
The principal activities of the Group consist of the business of insurance. The Group is
licensed to carry on general and long-term business. The Group is also authorised to provide
insurance management services.
Review of business
The Company
MAPFRE Middlesea p.l.c. (the ‘Company’) registered a profit before tax of €16.9 million
during the financial year ended 31 December 2025 (“FY 2025”) compared to the €10.5
million registered in the previous financial year (“FY 2024”) with post-tax profits of €11.6
million, compared to €7.1 million in FY 2024.
Premiums written by the Company reached €113.6 million (2024: €103.6 million), a 9.6%
increase over FY 2024, with growth in all classes of business but notably in Health, Propert y
and Group Life. MAPFRE Middlesea p.l.c. remained the leader of the non-life market with
the Company’s market share increasing marginally from the previous year, following the
receipt of provisional market data collated by the Association of Insurance Malta, as the
market registered a growth below that of the Company's.
The insurance service result increased to €16.4 million from €12.3 million of FY 2024, a
32.9% growth. Insurance revenue grew by 9.8% reflecting the growth in premium written.
Claims frequency improved in Motor with no significant increase in attritional claim severity,
whilst Health registered an increase in both frequency and severity mitigated by tariff
increase.
The Company’s net investment return amounted to €4.8 million compared to the €2.6 million
in FY 2024 as a result of a net dividend of €1.5 million received from MAPFRE MSV Life
p.l.c. (2024: €1.0 million) and a net dividend of €1.0 million from BEE Insurance
Management Limited with no comparative in the previous year. Fair value movements on the
fair value through profit or loss portfolio though positive were at same level of FY 2024.
Revaluation of investment property held by the Company rendered a marginal loss of €0.3
million against a marginal loss of € 0.2 million for 2024.
The Shareholder’s Funds of the Company at €91.5 million saw an increase of 8.3% during
FY 2025 resulting from the profit for the year exceeding the payment of d ividend for FY
2024 and positive investment value movements in equity. Net Asset Value per share as at
31 December 2025 amounted to €0.99.
MAPFRE Middlesea p.l.c.’s solvency position remained strong with net assets remaining
adequately above the capital requirements under Solvency II with the cover being reported in
the Solvency and Financial Condition Report (SFCR) to be published by the Company later
in the year.
2
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Directors’ Report - continued
Review of business - continued
MAPFRE MSV Life p.l.c.
MAPFRE MSV Life p.l.c. (“MAPFRE MSV Life” and “MMSV”) registered a profit before
tax of €15.7 million for FY 2025, as compared to the €15.0 million registered for the previous
year. Profit after tax is recorded at €11.2 million, compared to a €11.0 million in the previous
year.
Total business written for financial year 2025 totaled €209.9 million, an increase of 2.0%
over the prior year. Single premium business performed better than in 2024 as demand for
With‑Profits business improved. Regular premium business continued to perform well,
supported by strong demand for life protection products and sustained pension business. The
robust performance of the local economy and the high levels of liquidity present in the market
remained supportive of savings and investment products.
The MMSV With-Profits fund closed at €1.8 billion as at 31 December 2025 (2024: €1.9
billion) registering a total investment gain of €78.5 million generating a positive return of
4.3%. The investment return was similar to that in 2024, which had amounted to €79.7
million.
Total assets increased by 1.1% to stand at €2,384.0 million by the end of 2025.
Total shareholders’ funds at the close of 2025 amounted to €182.5 million (2024: €174.3
million), an increase of 4.7% over the previous year.
Other subsidiaries
The other subsidiaries within the Group, though not significant to the size of the Group, had a
mixed contribution to the results of the year.
During the year BEE Insurance Management Limited (‘BEE’) remained servicing the
Group’s insurance entities in the Information Technology sphere. A combined profit of €0.4
million was registered compared to the €0.5 million in the comparative period. BEE's
subsidiary EuroMed Risk Solutions which had surrendered its Corporate Service Provider
(CSP) license in January 2025 was placed into liquidation during 2025.
Church Wharf Properties Limited holds a property within the Regeneration of the Grand
Harbour Area. A negligible loss was recorded in the year similar to the loss registered at the
end of 2024. The directors continue to monitor the evolution of this project which gives a
potential future increase in value of this investment.
3
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Directors’ Report - continued
Review of business - continued
The Group
The Group registered a profit before tax of €29.6 million in FY 2025 compared to €24.8
million achieved in FY 2024. Profit after tax for FY 2025 closed at €20.5 million as
compared to the €18.0 million achieved in FY 2024. Group business written reaching €323.5
million saw an increase of 4.5% against that registered in FY 2024, with both insurance
companies remaining leaders in their respective markets.
MAPFRE Middlesea’s Group capital and reserves attributable to shareholders at 31
December 2025 amounted to €107.0 million (2024: €96.3 million) on a consolidated basis
with a net asset value per share of €1.16 as at 31 December 2025 mainly as the result for the
year outweighed the payment of dividend by MAPFRE Middlesea and MAPFRE MSV Life.
A review of the business of the Group for the year ended 31 December 2025 and an
indication of future developments are provided in the Chairman’s Statement and the President
and CEO Statement, which can be found in the front section of this Annual Report.
Whilst as a Group we have an important role to provide our customers with prosperity and
peace of mind, we acknowledge that we have a wider commitment to society by also
supporting those who are not our customers. Over the years we have developed a Corporate
Social Responsibility (CSR) policy framework which encompasses shareholders, the
environment, people, communities and customers. Through our CSR programme we
cooperate with and assist a number of public and private institutions, NGOs, museums,
foundations and associations who share similar goals and values as us.
Sustainability is also very high in our agenda. In line with the MAPFRE Group's
Sustainability Plan, the Group is committed to be carbon neutral by the end of 2030. To this
effect a number of initiatives have been and continue to be implemented which together with
investment in carbon credits have seen the local Group achieve carbon neutrality in 2025.
Good progress is also being registered in terms of the environment, social and governance
(ESG) dimensions.
4
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Directors’ Report - continued
Principal Risks and Uncertainties
The Group’s principal risks and uncertainties are further disclosed in Note 4 dealing with
management of risk as supplemented by Note 3 relating to the use of accounting estimates
and judgements in applying accounting policies, and Note 24 on insurance contract liabilities,
reinsurance contract assets and investment contracts liabilities covering assumptions
underlying their valuation.
Results and dividends
The consolidated profit or loss account is set out on page 40. A gross dividend in respect of
year ended 31 December 2025 of €0.091128 per share amounting to a total dividend of
€8,383,779 is to be proposed by the Directors at the forthcoming annual general meeting.
This is equivalent to a net dividend of €0.065217 per share amounting to a total net dividend
of €6,000,000 (2024: €4,800,000).
Directors
The Directors of the Company who held office during the period under review were:
Martin Galea
Antoinette Caruana
Gordon Cordina
Jose Maria del Pozo
Jose-Luis Jimenez (until 30 April 2025)
Elvira Lopez de Lara Merida (as from 30 April 2025)
Javier Moreno Gonzalez (as from 30 April 2025)
Eduardo Perez de Lema (until 30 April 2025)
Etienne Sciberras
Godfrey Swain
Paul Testaferrata Moroni Viani
In accordance with the Articles of Association of the Company, all Directors retire from
office at the Annual General Meeting and are eligible for re-election or re-appointment.
Further information is given in the Statement of Corporate Governance.
5
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Directors’ Report - continued
Statement of Directors’ responsibilities for the financial statements
The Directors are required by the Insurance Business Act, 1998 and the Companies Act, 1995
to prepare financial statements which give a true and fair view of the state of affairs of the
Group and the Company as at the end of each reporting period and of the profit or loss for
that period.
In preparing the financial statements, the Directors are responsible for:
• ensuring that the financial statements have been drawn up in accordance with
International Financial Reporting Standards as adopted by the EU;
• selecting and applying appropriate accounting policies;
• making accounting estimates that are reasonable in the circumstances;
• ensuring that the financial statements are prepared on the going concern basis unless it
is inappropriate to presume that the Group and the Company will continue in business
as a going concern
The Directors are also responsible for designing, implementing and maintaining internal
control as the Directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error, and that
comply with the Insurance Business Act, 1998 and the Companies Act, 1995. They are also
responsible for safeguarding the assets of the Group and the parent Company and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
The financial statements of MAPFRE Middlesea p.l.c. for the year ended 31 December 2025
are included in the Annual Report 2025, which is published in hard-copy printed form and
also made available on the Company’s website. The Directors are responsible for the
maintenance and integrity of the Annual Report on the website in view of their responsibility
for the controls over, and the security of, the website. Access to information published on the
Company’s website is available in other countries and jurisdictions, where legislation
governing the preparation and dissemination of financial statements may differ from
requirements or practice in Malta.
The directors confirm that, to the best of their knowledge:
• the financial statements give a true and fair view of the financial position of the Group
and Company as at 31 December 2025, and of its financial performance and its cash
flows for the year then ended in accordance with International Financial Reporting
Standards as adopted by the European Union on the basis explained in Note 1 to the
financial statements; and
• the Annual Report includes a fair review of the development and performance of the
business and the position of the Group and Company, together with additional
information of the principal risks and uncertainties that the Group and Company face.
6
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Directors’ Report - continued
Information pursuant to Capital Markets Rule 5.64
The Company has an authorised share capital of €31,500,000 divided into 150,000,000
ordinary shares with a nominal value of €0.21 each. The issued share capital of the Company
is €19,320,000 divided into 92,000,000 ordinary shares of €0.21 each. The issued shares of
the Company consist of one class of ordinary shares with equal voting rights attached.
The directors confirm that as at 31 December 2025, only MAPFRE Internacional (55.83%)
and Bank of Valletta p.l.c. (31.08%) held a shareholding in excess of 5% of the total issued
share capital.
Pursuant to the Company’s Articles of Association, the appointment of Directors to the Board
is reserved exclusively to the Company’s shareholders (in line also with general and
commonly accepted practice in Malta). Shareholders with 11% or more of the shares in issue
are entitled to appoint one director for every 11% holding, whilst the other shareholders are
entitled to appoint the remaining Board members at the Annual General Meeting in
accordance with the provisions of the Articles of Association. The Chairman shall be
appointed by the Board of Directors.
The rules governing the appointment and replacement of the Company’s directors are
contained in Articles 93 to 102 of the Company’s Articles of Association.
The Directors can only issue shares following an extraordinary resolution passed in the
General Meeting. This and other powers vested in the Company’s Directors are contained in
Articles 84 to 90 of the Company’s Articles of Association.
The Memorandum and Articles of the Company may be amended by means of an
extraordinary resolution of the Company during general meetings.
There are no agreements between the Company and the Directors on the Company’s Board or
employees providing for compensation on termination or cessation of their office for any
reason whatsoever.
It is hereby declared that as at 31 December 2025, information required under Capital
Markets Rules 5.64.2, 5.64.4, 5.64.5, 5.64.6, 5.64.7 and 5.64.10 is not applicable to the
Company.
7
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Directors’ Report - continued
Going concern
The Directors, as required by Capital Markets Rule 5.62 have considered the Group’s and
Company’s operational performance, the statement of financial position as at year end as well
as the business plans for the coming year, and declare that they have a reasonable expectation
that the Group and the Company have adequate resources to continue in operational existence
for the foreseeable future. For this reason, in preparing the financial statements, the Group
and Company are in a position to continue operating as a going concern for the foreseeable
future.
Auditors
The auditors, KPMG, have indicated their willingness to continue in office and a resolution
for their re-appointment will be proposed at the Annual General Meeting.
Information pursuant to Capital Markets Rule 5.70
There were no material contracts in relation to which a Director of the Company was directly
or indirectly interested.
Information pursuant to Capital Markets Rule 5.70.2
The Company Secretary is Dr Daphne Sims Dodebier and the registered office is Middle Sea
House, Floriana, Malta.
Information pursuant to Capital Markets Rule 5.68
We, the undersigned, declare that to the best of our knowledge, the financial statements
prepared in accordance with the requirements of International Financial Reporting Standards
as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and
profit or loss of the Company and its subsidiaries and that this report includes a fair review of
the development and performance of the business and the position of the Company and its
subsidiaries, included in the consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
Signed on behalf of the Company’s Board of Directors on 24 March 2026 by Martin Galea
(Chairman) and Godfrey Swain (Director) as per the Directors Declaration on ESEF Annual
Financial Report submitted in conjunction with the Annual Report and Accounts 2025.
8
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement
1. Introduction
In accordance with Rule 5.94 of the Capital Markets Rules, an Issuer whose securities are
admitted to trading on the Malta Stock Exchange should endeavour to adopt the principles as
promulgated within Appendix 5.1 of the Capital Markets Rules entitled The Code of
Principles of Good Corporate Governance (‘the Code’). Moreover, the Issuer is obliged to
prepare a report disclosing both compliance and non-compliance with the said principles and
the Company’s auditors are to include a report on the Corporate Governance Statement in the
Annual Financial Report of the Company.
The Board of Directors (‘the Board’) of MAPFRE Middlesea plc (the ‘Company’ or ‘MMS’)
notes that compliance with the said Code is not mandatory, however it acknowledges that the
principles are designed to serve as a guide for the Board and the Company’s Management in
the pursuit of objectives that are in the interests of both the Company and all its stakeholders.
The Board, therefore, firmly upholds the principles therein contained as guaranteeing the
standards of accountability, transparency and integrity inherent to good Corporate
governance. The Board continues to strive to adhere to the Code to maintain the highest
standards of disclosure both in relation to compliance with the Code as well as in relation to
explaining the rationale behind the instances of non-compliance.
As shall be evidenced by the information set out in this Statement and that contained in the
Remuneration Statement and the Report of the Remuneration Committee to the Shareholders,
the Company is of the opinion that it has, save as otherwise indicated herein, not only
complied with the provisions of the Code throughout the accounting period under review but
also acted in accordance with the spirit of the Code. In the Non-Compliance Section, the
Board then outlines the limited instances where there has been a departure from, or non-
application of, the principles as contained within the Code and the reasons therefore, in
accordance with the same Code.
2. Compliance with the Code
Principle 1: The Board
Good business, well done, is a force for good in society. Within this context, the Board’s role
and responsibility is to lead the Company, to discuss and approve the strategy for long-term
sustainable value and to exercise appropriate oversight; challenging the Management and
Internal Control Functions where necessary to this end.
9
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
2. Compliance with the Code - continued
Principle 1: The Board - continued
The maximum number of Directors pursuant to the Memorandum and Articles of Association
is ten. As at 31 December 2025 the Board was composed of a non-Executive Chairman,
seven non-Executive Directors and one Executive Director being the Chief Executive Officer
(President & CEO) of the Company as will be detailed. The Directors, appointed in terms of
the Memorandum and Articles of Association of the Company, were and remain competent,
trustworthy and solvent individuals and thus fit and proper to direct the business of the
Company. Martin Galea was re-appointed as the non-Executive Chairman of the Board
during the Board meeting held on the 30 April 2025, which followed the Annual General
Meeting (AGM) held on the same day.
During the said AGM the majority institutional shareholder MAPFRE Internacional S.A.
appointed Javier Moreno Gonzalez and Elvira Lopez de Lara Merida as new Directors,
replacing the outgoing Eduardo Perez de Lema and Jose Luis Jimenez who did not seek re-
election, in addition to the reappointment of Martin Galea, Etienne Sciberras and Jose Maria
del Pozo. The institutional shareholder Bank of Valletta p.l.c. re-appointed the retiring
Directors Gordon Cordina and Godfrey Swain, while the other shareholders re-appointed the
retiring Directors Antoinette Caruana and Paul Testaferrata Moroni Viani bringing the total
number of Directors to nine.
All of the Directors of the Company are approved by the Regulator further to a detailed
Personal Questionnaire process as being fit and proper to direct the business of the Company
and are deemed to conduct themselves with honesty, competence and integrity. Both on an
individual basis and collectively, the Members of the Board possess the necessary skills and
experience to ensure effective leadership of the Company and to make positive contributions
to the decision-making processes of the Company and to the business strategy as reflected
within the Company’s policies. Moreover, the Board ensures prudent and effective controls
in order to achieve both the short and long-term sustainability of the business and assesses the
compatibility of the MAPFRE Group policies with local legal and regulatory requirements,
adapting them where appropriate.
Effective Boards ensure that the business operates with a clear sense of purpose and
collective vision and the Board liaises closely with the President & CEO of the Company to
this end, in a consistent and continuing manner in order to ensure that the Board receives
timely and complete information in relation to the business and performance of the Company.
This enables the Board to maintain effective oversight of the decision-making process and to
exercise the aforementioned controls. Etienne Sciberras, appointed President & CEO as from
1 January 2025 replacing the Director Javier Moreno Gonzalez who resigned in order to take
up new responsibilities within the MAPFRE Group continued to act as Director throughout
the year.
10
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
2. Compliance with the Code - continued
Principle 1: The Board - continued
As has been customary in previous years, at the Board Meeting held subsequent to the AGM,
the Board delegated specific responsibilities to a number of Board Committees, namely the
Audit Committee, the Risk and Compliance Committee, the Investments Committee and the
Remuneration Committee, each of which operated under their respective formal terms of
reference as approved by the Board.
Further detail in relation to the Committees and the responsibilities of the Board is provided
under Principles 4 and 5 of this Statement.
Principle 2: Chairman and Chief Executive Officer
The positions of Chairman and the President & CEO of the Company, as per previous years,
continued to be held by different individuals throughout 2025 with a clear demarcation
between the leadership of the Board of Directors by the former and the latter's management
of the business of the Company, despite the strong cooperation between the two.
The Chairman is independent and is responsible for the overall effectiveness of the Board,
promoting open debate and facilitating constructive discussion. Through the Office of the
Company Secretary, the Chairman sets the Board agenda and ensures that all the Board’s
decisions are supported by comprehensive and timely information. The Chairman also
ensures that the Board discusses the pertinent issues with adequate depth, that the opinions of
all the Directors are taken into account and encourages active engagement by all the
members of the Board to constructively challenge Management where necessary and
generally promote the effective functioning of the Board.
The President & CEO, on the other hand, is charged with the leadership of the Management
team with the main role and responsibility of managing the Company’s business in line with
its Strategy and informing and ma king recommendations to the Board. Within this context,
2025 was the first year of the Company's three-year Strategic cycle as developed by
Management, discussed with the Chairman and approved by the Board. The evolution of the
Strategic Plan was extensively discussed during a dedicated Board Briefing held in October
2025, as detailed further below.
Within the parameters of this Board-approved Strategy, the President & CEO develops and
drives performance and leads the decisions on all matters affecting the operations and
technical performance of the Company in the interest of all the stakeholders save for those
matters specifically reserved to the Board or its' delegated Committees. The Company also
has Technical Committees composed of senior members of the relative technical areas that
hold regular meetings and a Management Committee that meets on a monthly basis bringing
together the Chief Officers of the various business and support areas under the Chairmanship
of the President & CEO.
11
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
2. Compliance with the Code - continued
Principle 2: Chairman and CEO - continued
The positions of the Chairman of the Board and President & CEO are distinguished
accordingly within the Terms of Reference of the Board of Directors and remain completely
independent from one another to avoid concentration of authority within a single individual,
to differentiate leadership from the running of the business and to maintain clear lines of
accountability and responsibility.
Principle 3: Composition of the Board
The Board considers and history has shown, that the number of Members as stipulated in the
Memorandum and Articles of the Company are appropriate relative to the size of the
Company and its operations.
The combined and varied knowledge, experience and skills of the Board members, including
a broad knowledge of the business of the Company and awareness of statutory and regulatory
requirements, provide a balance of competencies, as required, and add value both to the
functioning of the Board and to the direction given to the Company. In this regard the
Company remains committed to non-discrimination, not least in its Boardroom, promoting a
diverse and inclusive culture where Directors’ views are heard, concerns are attended to and
the environment does not tolerate bias, discrimination or harassment of any kind.
The Company’s Articles of Association determine the composition of the Board. The
appointment of Directors to the Board is accordingly reserved exclusively to the Company’s
shareholders, except in so far as an appointment may be made to fill a casual vacancy. All
Directors, as well as some key officers, are required to fulfil the 'fit and proper' regime
prescribed by the Malta Financial Services Authority (‘MFSA’) in line with standard
regulatory due diligence procedures. Moreover, all Directors are required to apply the
necessary time and attention to their duties and limit the number of directorships held in other
companies, thereby also ensuring the proper performance of their functions.
In 2025 the majority of the Board members remained non-Executive Directors, with only one
Executive Director. Of the nine Directors sitting on the Company's Board, seven were male
and two were female as at 31 December 2025 whereas, at the same date, out of eight non-
Executive Directors six were male and two were female. The presence of the President &
CEO around the Boardroom table ensured the provision of direct input as required to
facilitate Board discussions. In addition, members of Senior Management were invited to
report to the Board as and when required, thereby securing effective information flows as
well as fostering a culture of continuous dialogue between the Board and the Company’s
Management.
As at the date of this review, the Board consists of five independent Directors (including the
Chairman) and four non-independent Directors, including the only Executive Director (as
indicated on page 14 of the Annual Report) as defined by the Code.
12
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
2.Compliance with the Code - continued
Principle 3: Composition of the Board - continued
In determining the independence or otherwise of its Directors, the Board considers, amongst
others, the principles relating to independence of directors contained in the Code, the
Company’s own policies, as well as general principles of good Corporate governance.
In relation to Code Provision 3.2.5 specifically the Code requires that the Board states its
reasons if it determines that a director is independent notwithstanding inter alia if the
director: “has served on the board for more than twelve consecutive years”.
It is noted in this regard that Paul Testaferrata Moroni Viani (as from April 2022) has served
on the Board for a period of more than twelve consecutive years. The Company however,
retains that Paul Testaferrata Moroni Viani has sufficient experience and maturity to remain
independent of character and objective in his judgment at all times notwithstanding the lapse
of the recommended twelve years. Similarly, the Board Chairman Martin Galea (as from his
re-appointment in April 2024) has also served on the Company's Board for a period of more
than twelve years but the Company is of the opinion that his knowledge and experience of the
business remain invaluable while further transitions at this stage, given the appointment of
new CEOs for both the Company and its main subsidiary as from 1 January 2025, would not
be of benefit to any of the stakeholders. Martin Galea is moreover highly competent and
astute and will undoubtedly remain entirely unbiased in his judgement despite his service
over the years, continuing to act in accordance with the highest principles of governance.
In terms of Code provision 3.4 each non-Executive director has moreover submitted his / her
confirmation in writing that he / she undertakes:
i. to maintain in all circumstances his independence of analysis, decision and action;
ii. not to seek or accept any unreasonable advantages that could be considered as
compromising his / her independence; and
iii. to clearly express his / her opposition in the event that he / she finds that a decision of
the Board may harm the Company.
Principle 4: The Responsibilities of the Board
The Board acknowledges its statutory mandate to establish and maintain Corporate
governance practices that provide clear lines of accountability and responsibility to support
effective decision-making and to monitor the implementation thereof. The Board fulfils this
mandate and discharges its responsibilities through the execution of the four basic principles
of Corporate governance namely, accountability, monitoring, strategy formulation and policy
development.
13
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
2. Compliance with the Code - continued
Principle 4: The Responsibilities of the Board - continued
The Board continually and consistently reviews all the different aspects of the Company
within the parameters of the relevant laws, regulations and codes of best practice. It seeks to
ensure adherence to high ethical standards whilst taking into account all stakeholders’
interests, maintaining an effective dialogue with all stakeholders, monitoring the application
of management policies and motivating Company Management.
Principle 5: Board Meetings
The Board of Directors sets and supervises the strategy and the policies of the Company, both
of which are discussed on a regular basis, and the Board's agenda as well as its business are
managed in such a way so as to ensure effective supervision of the Company’s operations in
accordance therewith.
The Board meets as often as required to discharge its duties effectively but no less than five
times a year. As aforementioned, members of the Management team are invited to attend
Board meetings from time to time, to update and provide the Directors with a direct report
relative to the items on the agenda. A detailed review of the Company's Management
Accounts and Key Performance Indicators (as promulgated by the MAPFRE Group in line
with industry norms) is carried out at every Board Meeting and the background information
on various subjects provided, particularly those requiring the approval of the Board.
The Board also remains actively involved in monitoring progress against the set Budget and
Strategy and in approving material or significant transactions.
The Chairman in conjunction with the Company Secretary ensures that all relevant issues are
on the Board agenda and supported by relevant and complete information. The agenda for
each meeting seeks to strike a balance between long-term strategic objectives and shorter-
term performance matters.
Notices of the dates of forthcoming Board meetings are circulated well in advance of the
relative meetings and meeting packs containing all relevant information, including the
minutes of the previous Board Meeting, are circulated to the Directors ahead of each meeting
by the Company Secretary. In issuing these communications, regard is had to the timing in
order to allow sufficient opportunity for the Directors to review the information and prepare
for the next Board or Committee meeting as scheduled within the annual meeting calendar.
Minutes are taken of each and every Board meeting faithfully recording attendance, matters
discussed, action points and resolutions. These minutes are subsequently made available to
all Directors for review, and then signed off by the Chairman.
Decisions at Board level are taken by a majority vote of those present subject to the
Chairman’s casting vote as may be necessary.
14
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
2. Compliance with the Code - continued
Principle 5: Board Meetings - continued
During financial year 2025, the Board of Directors of the Company held eight Board
Meetings which were attended as per below.
Antoinette Caruana (NED, I)8
Gordon Cordina (NED , I)8
Jose Maria del Pozo (NED)5
Martin Galea (Chairman) (NED, I)8
Jose-Luis Jimenez (NED, until 30 April 2025)-
Elvira Lopez de Lara Merida (NED, appointed as from 30 April 2025)*5
Javier Moreno Gonzalez (NED, appointed as from 30 April 2025)*4
Eduardo Perez de Lema (NED, until 30 April 202524)-
Etienne Sciberras (President & CEO)8
Godfrey Swain (NED, I)8
Paul Testaferrata Moroni Viani (NED, I)7
NED – Non-executive Director
I – Independent
* With regulatory approval as from 28 July 2025;
** With regulatory approval as from 13 October 2025
Moreover, during 2025 a Board Briefing was also held in order to provide the Directors with
more detailed information on the subject matter identified as well as to allow opportunity for
deeper discussions of pertinent issues. The focal point of the Directors’ Briefing in October
was to carry out an in-depth review of the evolution of the Strategic projects during the first
year of the three-year plan including the relative Budget and to discuss and approve the draft
Budget requirements for the following year.
Principle 6: Information and Professional Development
No Induction Briefing was delivered in 2025 as both new Directors appointed to the
Company's Board at the AGM held on 30 April 2025 were long-standing employees of the
MAPFRE Group, Javier Moreno Gonzalez having previously served as the Company's
President & CEO while Elvira Lopez de Lara Merida was the Distribution Channels Manager
for MAPFRE S.A. prior to her appointment and thus both familiar with the strategy and
operations of the Company in Malta. In all other cases, however, where a new Director is
appointed a formal and structured induction programme consisting in a series of presentations
and meetings with members of the Management team of the Company is conducted to enable
new incumbents to familiarise themselves with the Company’s strategy, risk appetite and
operations.
15
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
2. Compliance with the Code - continued
Principle 6: Information and Professional Development - continued
During 2025 the members of the Company's Board continued to benefit from the MAPFRE
Group structured Board training and development programme including a full on-line
training schedule available for subscription covering a range of topics ranging from
Operational to Technical and Risk to AML matters. The key objective of the programme is to
contribute to the continued professional development of the Directors and the Board’s
collective awareness of corporate governance, solvency, insurance finance, strategy and
operations. Physical training sessions were also held specific to new regulatory requirements
including the obligations arising from the Digital Operational Resilience Act and Corporate
Governance.
Moreover, Directors remain at liberty to take independent professional advice on any matter
at the Company’s expense where they deem it necessary in order to better discharge their
duties as Directors and have open access to the advice and services of the Office of the
Company Secretary and that of all other Chief Officers. The Company Secretary remains
mindful at all times of the responsibility of ensuring adherence to Company policies, Board
procedures as well as the facilitation of continual and consistent information flow within the
Board and its Committees.
The President & CEO is appointed by and enjoys the full confidence of the Board and
ensures that systems are in place to cater for, amongst others, consistent and continuous
support and monitoring of Management, development and training of employees and
Directors, as well as succession planning, as required by the provisions of principle 6.4 of
Appendix 5.1 of the Capital Markets Rules. The President & CEO, although responsible for
the recruitment and selection of Senior Management, consults with and acts on the advice of
the Remuneration Committee and the Board generally relative to appointments and
succession for Senior Management. Training (both internal and external) of management and
employees is prioritised and is implemented through the Human Resources Department.
Several training sessions, both on-line and live, were also held on various topics during the
course of 2025 including on Cyber Security, Business Continuity, Compliance, Data
Protection and the Customer Experience.
Indeed 2025 saw the culmination of an intense and specialised training initiative for the
President & CEO, Chief Officers and Heads in conjunction with external specialists referred
to as the Transformational Leadership Programme. The Programme represented a significant
investment in the leadership team intended to boost collaboration, competence and encourage
positive transformation across the Management team with initiatives including individual and
team coaching sessions commencing in Q4 2023 and running over a period of eighteen
months.
16
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
2. Compliance with the Code - continued
Principle 7: Evaluation of the Board’s Performance
During the year under review, the Board once again undertook an evaluation of its own
performance, the Chairman’s performance and that of its Committees. The evaluation was
not conducted externally, but rather, the evaluation exercise was conducted through a Board
Effectiveness Questionnaire prepared by the Compliance Function in cooperation with the
Company Secretary and the Chairman. The outcome of the exercise was summarised into a
Report based on the replies of each individual Director that was then submitted to the
Chairman before being circulated amongst all Board members. The Report was then
discussed during an informal meeting amongst the Directors and the Company Secretary.
No requirement for material changes in the governance structure or processes resulted from
this evaluation exercise.
Principle 8: Committees
The activities of the Board and of the Company’s Senior Management team are additionally
supported by the Company’s Board Committees structured in such a way as to assist in the
guiding and monitoring of particular business processes and specific governance issues. The
said Board Committees are the Audit Committee, the Risk and Compliance Committee, the
Investments Committee and the Remuneration Committee.
The Terms of Reference of all the Board Committees have been set out and approved by the
Board of Directors and by the MFSA.
Audit Committee
The Audit Committee’s terms of reference are modelled on the recommendations of statutory
directives, the Capital Markets Rules and the principles of Corporate Governance, whilst also
reflecting the provisions of the relevant MAPFRE Group principles. The responsibilities of
the Audit Committee include the following:-
i. monitoring of the financial reporting process
ii. monitoring of the independence and effectiveness of the Company’s internal control,
internal audit and risk management systems
iii. monitoring of the audit of the annual and consolidated accounts
iv. maintenance of communication on such matters between the Board, management,
the external Auditors and the internal Auditors
v. making of recommendations to the Board in relation to the appointment of the
external Auditor and the approval of the remuneration and terms of engagement of
the external Auditor following appointment by the Shareholders in general meeting
17
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
2. Compliance with the Code - continued
Principle 8: Committees - continued
Audit Committee - continued
vi. monitoring and reviewing of the external Auditor’s independence and in particular
the provision of additional services
vii. development and implementation of a policy on the engagement of the external
Auditor to supply non-audit services
viii. reviewing of actuarial reports
ix. management of financial risks
x. analysis and endorsement of the Annual Internal Audit Plan
xi. verification of the arm’s length nature of related party transactions and
xii. oversight over the statutory audit process including the setting of the relative fees in
discussion with the external auditors in accordance with the provisions of the
Statutory Regulations governing statutory audits of public interest entities within the
European Union.
The Committee protects the interests of all stakeholders in general and particularly those of
the shareholders and assists Directors in ensuring the accuracy of the Company’s Financial
results and reporting. It ensures that the Company’s Accounting and Finance functions are
robust and transparent, advises the Board on financial reporting in terms of both the Financial
Statements and announcements relative to performance and has oversight of the Internal
Audit Function to ensure adequate resources, independence and monitor follow up on
pertinent audit recommendations.
In regard to the latter, Internal Audit is an independent appraisal function established to
examine and evaluate the activities of the Company and its subsidiaries. The Internal Auditor
reports to the Audit Committee and attends its meetings. The Internal Auditor is charged by
the Audit Committee with the conducting of business process risk-based audits aimed at
assessing the adequacy of controls and business process efficiency. The Internal Audit Area
also liaises closely with the MAPFRE Group Internal Audit Area to this end.
The Audit Committee moreover ensures co-operation between the internal and external
auditors of the Company.
Furthermore, although no such instances arose within 2025, the Audit Committee also
reviews related party transactions, considering their nature and materiality and approves them
if it deems fit, as well as overseeing the implementation of the Company’s Internal
Information System including any reports received by the Whistleblowing Reporting Officer.
18
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
2. Compliance with the Code - continued
Principle 8: Committees - continued
Audit Committee - continued
The composition of the Company’s Audit Committee is regulated by the Capital Markets
Rules and the Malta Financial Services Authority is kept informed as to any changes in its
composition. In terms of Capital Markets Rule 5.117.3, Jose Maria del Pozo and Martin
Galea are the members of the Audit Committee with the necessary qualifications, experience
and knowledge to render them competent in accounting and auditing. Jose Maria del Pozo
having held the position of Chief Financial Officer of the MAPFRE Group since 2018 and a
consultant professor for accounting and financial analysis, while Martin Galea is qualified in
accounting and audit with years of experience in company management.
Godfrey Swain was re-appointed for a second term as Chairman of the Audit Committee by
the Board of Directors in accordance with Capital Markets Rule 5.117.4 as of 30 April 2025.
Of the four Directors making up the Audit Committee, three are considered Independent
Directors in accordance with the criteria set out in Capital Markets Rule 5.119.
The Audit Committee held seven meetings during 2025. In accordance with Capital Markets
Rule 5.117.2, three out of four members are considered independent in line with the criteria
set out in Capital Markets Rule 5.119 as stated. These are Godfrey Swain, Antoinette
Caruana and Martin Galea. The Audit Committee members and relative attendance at
meetings is listed below.
Antoinette Caruana 7
Martin Galea 7
Jose Maria del Pozo 6
Godfrey Swain (Chairman) 7
In accordance with Capital Markets Rule 5.118, the Board considers the four Audit
Committee members as having the required competence individually and jointly as a
Committee, due to their professional background and experience in company management at
a senior level, as well as in other sectors, including financial and insurance, at both national
and international level.
The President & CEO, the Chief Financial Officer and the Chief Internal Auditor, amongst
other members of Management, attend the Audit Committee meetings by invitation. The
Whistleblower Reporting Officer reports to the Audit Committee as and when required. The
external auditors are invited to attend meetings of the Audit Committee and are entitled to
convene a meeting of the Committee if they consider that it is necessary. The Company
Secretary also acts as Secretary to the Audit Committee.
19
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
2. Compliance with the Code - continued
Principle 8: Committees - continued
Audit Committee - continued
The Chairperson of the Audit Committee reports to the Board at every Board meeting
providing a summary of the salient matters discussed at Committee level thus ensuring
transparency and fostering communication and continuity between the said Board Committee
and the other members of the Board.
Risk and Compliance Committee
The Board has responsibility for the Company's overall approach to strategic decision-
making and effective risk management (financial and non-financial including reputational).
Thus the Board exercises oversight of risk and how it is managed with appropriate
accountability to stakeholders.
The Risk and Compliance Committee has a two-fold function: it assists the Board in
overseeing the Company’s compliance with the obligations imposed by legislation and other
rules and regulations as relevant to the Company and its business and; it maintains oversight
for review and proper implementation of the Company’s Risk policies and for assessing and
advising the Board on high-level risk-related matters, including the different types of Risk
which the Company and its subsidiaries may be exposed to from both a financial and non-
financial perspective.
To this end the Committee ensures that the Company’s strategy and risk appetite are aligned
and monitors the stress testing framework, governance and internal control structures.
Furthermore, the Committee approves the annual plan for the Compliance Function and is
updated at every meeting on progress in relation to the said plan and other matters referring
to Regulatory Compliance risk including the relationship with the regulatory authorities.
The Money Laundering Reporting Officer, the Complaints Officer and the Anti-Fraud
Officer report directly to this Committee. The Money Laundering Reporting Officer and the
Compliance Officer of the subsidiary entity Bee Insurance Management Ltd. also reports to
this Committee at every meeting.
The Risk and Compliance Committee held six meetings during 2025. The Committee, as re-
elected during the Board Meeting held after the AGM on 30 April 2025, comprised the
following members and their respective attendance at the meetings held was as detailed:
Diane Bugeja 4
Martin Galea (Chairman) 6
Jose Maria del Pozo 6
Etienne Sciberras 6
20
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
2. Compliance with the Code - continued
Principle 8: Committees - continued
Risk and Compliance Committee - continued
The Chief Compliance Officer and the Chief Risk Officer, amongst others as may be
required, attend the Committee meetings by invitation. The Company Secretary also acts as
Secretary to the Committee.
The Chairperson of the Risk & Compliance Committee reports to the Board at every Board
meeting providing a summary of the salient matters discussed at Committee level thus
ensuring transparency and fostering communication and continuity between the said Board
Committee and the other members of the Board.
Investment Committee
The Investment Committee is a joint Committee composed of Directors of the Company and
Directors of its subsidiary MAPFRE MSV Life p.l.c.. The Investment Committee oversees
the investment activities of the Company and its subsidiaries, executes its policies and
guidelines, scrutinises and approves material transactions and monitors results.
Although the Investment Committee meets more regularly, the business of the Company was
discussed at four meetings during 2025. The Committee members and relative attendance to
meetings is listed below.

Simon Azzopardi | 3
Juan Bernal Aranda | 3
Romeo Cutajar (Chairman) | 4
Jose-Luis Jimenez, until 30 April 2025 | 2
Jose Maria del Pozo | 4
Javier Moreno, until 30 April 2025 | 3
Etienne Sciberras, as from 30 April 2025 | 2
Patrick Spiteri Swain | 4
Godfrey Swain | 4
Paul Testaferrata Moroni Viani | 3

The CEO of the subsidiary MAPFRE MSV Life p.l.c., the Chief Financial Officer both of the
Company and of its subsidiary MAPFRE MSV Life p.l.c., the MAPFRE Regional Chief
Financial Officer, amongst others as may be required, attend the Committee meetings by
invitation. The Company Secretary of the subsidiary MAPFRE MSV Life p.l.c. acts as
Secretary to the Committee.
21
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
2. Compliance with the Code - continued
Principle 8: Committees - continued
Remuneration Committee
The Board of Directors approves the remuneration of Directors and Chief Officers through
the Remuneration Committee which remuneration is set based on the principles established in
the Remuneration Policy as approved by the shareholders during the General Meeting on a
bi-annual basis. The shareholders also approve the maximum aggregate Directors'
emoluments on an annual basis.
Further detail on the various aspects of how the Company remunerates its employees, the
workings of this Committee and information relative to its’ meetings in 2025 are considered
in the Remuneration Statement and Report to the Shareholders.
The Remuneration Committee held three meetings during 2025. The Committee, as re-
elected during the Board Meeting held after the AGM on 30 April 2025, comprised the
following members and their respective attendance at the meetings held was as detailed:

Antoinette Caruana (Chairperson) | 3
Gordon Cordina | 3
Martin Galea | 3

The President & CEO for MAPFRE Middlesea p.l.c., the CEO for MAPFRE MSV Life p.l.c.
and the Chief Officer for Human Resources, amongst others as may be required, attend the
Remuneration Committee meetings by invitation. The Company Secretary also acts as
Secretary to the Committee.
The 2025 Annual Report includes a separate Remuneration Statement in terms of Code
Provisions 8.A.3 and 8.A.4 and Remuneration Report in terms of Code Provision 12.26K.
Principle 9: Relations with Shareholders and with the Market
The Company recognises the importance of maintaining a dialogue with its shareholders and
of keeping the market informed to ensure that its strategies, as well as performance, are not
merely transparent but also understood. The Board is of the view that during the period under
review the Company has communicated effectively with the market through the various
company announcements and press releases.
The Company also communicates with its shareholders through the Company’s Annual
General Meeting (‘AGM’) concerning which further detail is provided under the section
entitled General Meetings. The Chairman ensures that all relevant individuals including the
Chairpersons of the Board Committees are present at the AGM to answer any questions as
may arise.
22
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
2. Compliance with the Code - continued
Principle 9: Relations with Shareholders and with the Market - continued
Apart from the AGM, the Company communicates with its shareholders through the Annual
Report, as available for review and downloading from the Company’s web site. The
Company’s website (www.mapfre.com.mt) also contains information about the Company and
its business, including the six-monthly financial statements and all issued company
announcements together with a section entirely dedicated to investor relations for the benefit
of all shareholders and the general public.
Furthermore, the Chairman ensures that constant and consistent communication is maintained
with all stakeholders including the shareholders to discuss matters of significant importance
or to address particular issues or concerns. To this end, the Chairman and the President &
CEO maintain open dialogue with the major shareholders and the Chairman, President &
CEO and Company Secretary hold an annual meeting with representatives of the Malta
Association of Small Shareholders to discuss various matters in the interests of the minority
shareholders.
Individual shareholders can raise matters relating to their shareholding and the business of the
Company at any time throughout the year via the Office of the Company Secretary, a facility
which is well availed of and functions very well in practice. Shareholders are also given the
opportunity to ask questions at the AGM or submit written questions in advance and the
Company recognises their statutory right to request the convening of an extraordinary general
meeting in accordance with Article 52 of the Articles of Association of the Company and
Article 129 of the Companies Act (Cap. 386 of the Laws of Malta).
Principle 10: Institutional Shareholders
The Company’s Institutional shareholders keep the market updated on issues related to their
respective companies through company announcements, press releases, press meetings and
their web site. During the year under review, the controlling shareholder, MAPFRE S.A,
issued various communications in connection with its international operations abroad. The
other institutional shareholder, namely Bank of Valletta plc, is a listed company on the Malta
Stock Exchange and consequently a steady flow of information is maintained as
aforementioned. In addition, the six monthly and annual results include a section on the
insurance interests of institutional shareholders.
23
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
2. Compliance with the Code - continued
Principle 11: Conflicts of Interest
The Directors are strongly aware of their responsibility to act in the interest of the Company
and its stakeholders including its shareholders at all times, irrespective of whom appointed
them to the Board, and of their obligation to avoid conflicts of interest. During the period
under review, the Board maintained its practice that in the event of a real or potential conflict
of interest arising in respect of a Director in connection with any transaction or other matter,
the interest is to be declared and the individual concerned shall refrain from taking part in
proceedings or decisions relating to the matter. The Board minutes evidence such
declarations as and when they arise.
In accordance with the MAPFRE Corporate Governance Policy and the Policy for Managing
Conflicts of Interest, a Director is to avoid situations in which he could have a conflict of
interest, whether direct or indirect, actual or potential, with the interest of the Company and
shall ensure that personal interests of any nature do not take precedence over the interests of
the Company and its stakeholders.
The Company also has an Internal Code of Conduct Relating to Listed Securities addressed
to all directors and selected officers of the Company and its Subsidiary undertakings. The
aim behind this Code is to ensure compliance with the Prevention of Market Abuse
Regulatory Framework as well as the recommendations and principles contained in the
Capital Markets Rules. The Company keeps a record of all advance notices received in
connection with permitted dealings by directors and selected officers and acknowledgements
of such advance notices. The Company reminds all Directors and senior officers of their
obligation to conform to the Code on an annual basis.
As required by principle 11.3 of Appendix 5.1 of the Capital Markets Rules a Directors’
beneficial interest in the share capital of the Company as at 31 December 2025 has been
declared by Paul Testaferrata Moroni Viani stemming from his indirect shareholding in the
Company’s shares through his shareholding in family businesses.
Principle 12: Corporate Social Responsibility
Throughout 2025, MAPFRE Malta continued to meet its Corporate Social Responsibility
objectives by collaborating with a wide range of organisations to deliver numerous initiatives.
These included food and blood donation drives, environmental activities, and financial
support to several charitable entities and NGOs. Among the beneficiaries were Caritas,
Hospice, Puttinu Cares, Dar Bjorn, Dar il-Kaptan, and YMCA, to name a few.
As in previous years, Fundación MAPFRE allocated over €200,000 towards projects in Malta
across areas such as road safety awareness, health campaigns, and social initiatives. The
Foundation once again partnered with Caritas Malta to support the Adventure Therapy
Cycling Project, offering therapeutic outdoor activities for adolescents facing substance abuse
challenges.
24
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
2. Compliance with the Code - continued
Principle 12: Corporate Social Responsibility - continued
During 2025, Fundación MAPFRE also reinforced its commitment to road safety by
contributing to educational efforts aimed at young people and the wider public. In addition to
its ongoing campaign with Malta Public Transport, the Foundation also continued its
partnership with Doctors for Road Safety (D4RS), who share the same concerns regarding
this pressing national issue.
A key highlight of the year was Fundación MAPFRE’s support for the Goya exhibition held
in Malta, which stood out as an important cultural milestone. The exhibition brought
internationally recognised works to the local community, further reinforcing MAPFRE’s
commitment to making art and culture more accessible and enriching Malta’s cultural
landscape. The exhibition was attended by over 45,000 visitors.
Fundación MAPFRE also strengthened its commitment to community wellbeing through a
dedicated partnership with the Malta Society for Wellbeing, supporting their POP Up
initiative. The collaboration created safe, welcoming spaces where individuals could learn
simple practices to support mental and emotional health, aligning with MAPFRE’s broader
efforts to enhance overall wellbeing within the community.
3.Non-compliance with the code
Principle 3: Composition of the Board
The Code recommends that the Board of Directors be composed of Executive and non-
Executive Directors, including Independent non-Executives. The Company’s Board, as
explained in Section 2 – Principle 3 of this Statement, is composed almost exclusively of
non-Executive Directors with the one exception being the Chief Executive Officer of the
Company who is also a member of the Board and thus arguably does not represent the
balance as suggested by the Code.
That said, the appointment of Directors to the Board is a matter reserved exclusively to the
Company shareholders (except in the case of the filling of a casual vacancy) as provided for
in the Memorandum and Articles of Association and each Director retires from office at the
subsequent AGM although he / she may stand for re-election.
Nominations to the Board require an 11% shareholding which nominations are to be
communicated to the Company in writing. Provided the nominations do not exceed the
vacancies on the Board, those nominations are confirmed subject to their approval at the
Annual General Meeting of shareholders. Therefore, the composition of the Board of
Directors is determined by the shareholders during the AGM.
25
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
3.Non-compliance with the code - continued
Principle 3: Composition of the Board - continued
The President & CEO of the Company presents his Management Report at every Board
meeting and various Senior Managers attend by invitation to report on salient matters thereby
ensuring a constant and effective flow of information between the Company’s Management
and Board of Directors.
Principle 4: The Responsibilities of the Board
Code Provision 4.2.7 recommends: “the development of a succession policy for the future
composition of the Board of Directors and particularly the executive component thereof, for
which the Chairman should hold key responsibility”.
Regard being had to the non-executive role of most of the Company’s Directors and in view
of the facts explained above, particularly that the appointment of Directors is a matter
reserved exclusively to the Company’s shareholders and that every director retires from
office at the Annual General Meeting, the Company has not felt the necessity to date to
formalise a succession policy for the Board of Directors. That said, the Company does have
and uphold a policy on the selection of Directors not least to promote diversity within the
Board.
Insofar as the management of the Company, the Human Resources Area maintains a
succession plan for the key executives which plan is monitored and discussed by the
Remuneration Committee as necessary.
Principle 7: Evaluation of the Board’s Performance
Code Provision 7.1 recommends: “the Board should appoint a committee chaired by a non-
executive Director in order to carry out a performance evaluation of its role”.
As explained above the Board has not appointed a specific committee to carry out a
performance evaluation but has rather opted to have an annual performance evaluation
exercise carried out under the auspices of the internal Compliance Area through the
compilation of a Board Effectiveness Questionnaire by each individual Director.
The questionnaire is particularly robust and is structured into eight sections with a total of 63
statements covering several aspects of Board membership including the understanding of the
workings of the Board and its Committees, the Company’s products and services, distribution
channels, strategy and risk, as well as governance, training requirements, subsidiaries and
contingent liabilities. Directors are also invited to elaborate further on any of the statements
at the end of the questionnaire.
26
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
3.Non-compliance with the code - continued
Principle 7: Evaluation of the Board’s Performance - continued
An objective and independent report as to the overall outcome of the findings is then drawn
up by the Compliance Area and shared with the Chairman to co-ordinate further individual or
group discussion with the Directors based on the replies.
For these reasons the process is deemed to be comprehensive and sufficient to meet the
intended aims.
Principle 8B: Nomination Committee
Pursuant to the Company’s Articles of Association and as aforementioned the appointment of
Directors to the Board is reserved exclusively to the Company’s shareholders. Shareholders
holding 11% or more of the issued shares are entitled to appoint one director for every 11%
holding, whilst the other shareholders are entitled to appoint the remaining Board members at
the Annual General Meeting in accordance with the provisions of the Articles of Association.
Thus the procedure is sufficiently defined and the requirements of transparency are also well-
met without the need for the establishment of a formal Nomination Committee.
Principle 9: Relations with Shareholders and with the Market
Code Provision 9.3 recommends the Company having a mechanism in place to resolve
conflicts between minority shareholders and controlling shareholders.
The Board is mindful of its duty to act in the interest of all stakeholders, independent of
whom appoints them and the balance between the interests of all shareholders is of
paramount consideration at all times. To this end the Board seeks to make available a fair,
balanced and understandable assessment of the Company's position and prospects, publish all
relevant information on its web site and ensures there are channels to receive feedback from
stakeholders including shareholders.
To this end, although the Company does not have a specific mechanism in place there is open
dialogue between Management and all the non-Executive Directors of the Company. The
Company also ensures a good relationship with the Malta Association for Small Shareholders
maintaining an open-door policy with them, as well as with any individual shareholders who
may be interested in making direct submissions to the Company, through the Office of the
Company Secretary.
In light of this, and as the Company is mindful of the protection granted to minority
shareholders in terms of the Companies Act (Cap. 386 of the Laws of Malta) by which it
would necessarily be bound to abide, the Company is of the opinion that no formal
procedures to resolve conflict between minority and controlling shareholders are necessary at
this stage.
27
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
Internal Control and Risk Management System
This information is being provided in terms of Capital Markets Rule 5.97.4.
While authority to manage the daily business of the Company is delegated to the President &
CEO within the limits set by the Board, the Board is ultimately responsible for the
Company’s internal control systems and for ensuring their effectiveness. Such systems are
designed to manage, rather than eliminate, the risks associated with achieving business
objectives and can only provide reasonable (as opposed to absolute) assurance against
material misstatement or loss.
The Company manages its internal risk through the ‘three lines of defence’ approach,
ensuring achievement of commercial aims while continuing to meet all legal and regulatory
requirements. These then feed into the Board through the Audit Committee and the Risk and
Compliance Committee in order for the Board to maintain oversight of the processes and
procedures ensuring the effectiveness of the systems of internal control.
The key features of the Company’s systems of Internal Control remain primarily three-fold,
in terms of its organisation, risk identification and reporting. Insofar as the former, the
Company has a clear organisational structure and structured reporting lines including from
the Boards of Directors of subsidiary and associated entities. The MMS Chairman is also kept
informed as to the operations of the subsidiary companies as aforementioned and through the
other Company Directors and Senior Management who sit on the subsidiary boards,
Management and Operational Committees.
In terms of Risk Identification, the Board reviews its Risk Management policies and
strategies and oversees their implementation to ensure that identified key risks are properly
assessed and managed through a dedicated and specialised Risk Area reporting in to the
Board Committee as previously referred to. Moreover, the risk-based nature of the Solvency
II regime requires the company to have an effective risk management system in place to
identify, measure, manage, monitor and report on the main risks which could impact the
entity. This process is embodied in the annual ORSA (Own Risk and Solvency Assessment)
process. Expert judgements, stress testing and sensitivity analysis are important elements in
the company’s risk identification framework embedded in the ORSA process. The ORSA
report is submitted to the competent Authority on an annual basis after a thorough discussion
at the level of the Risk and Compliance Committee and ultimate approval by the Board of
Directors.
Lastly with reference to Reporting, functional, operating and financial reporting standards are
applicable to all entities of the Group. Systems and procedures are in place to identify,
control and report on the major risks. The Board receives periodic management information
giving comprehensive analysis of financial and business performance including variances
against budgets and detailed presentations on various aspects of the business from an
operational and a technical perspective.
28
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Corporate Governance Statement - continued
General Meetings
This information is being provided in terms of Capital Markets Rule 5.97.6.
The General Meeting is the Company’s most supreme decision-making organ and its
functions are governed by, and conducted in accordance with, the Company’s Articles of
Association. The General Meeting is called with not less than twenty-one days’ notice in
writing. In addition to any matters which are deemed to constitute ’special business’, the
annual general meeting deals with matters of a recurring nature namely, the declaration of a
dividend, the consideration of the accounts, statement of financial position and reports of the
directors and auditors, the election of directors, the appointment of the auditors and the
authorisation of the directors to set their remuneration. The Memorandum and Articles of the
Company may be amended by means of an extraordinary resolution (as defined in the
Articles) of the Company during general meetings.
The Board of Directors is responsible for developing the agenda for the AGM and sending it
to the shareholders.
Shareholders’ rights can be exercised in accordance with the Articles of the Company, the
Companies Act and the Capital Markets Rules. Accordingly, all shareholders registered in the
Shareholders’ Register on the Record Date as defined in the Capital Markets Rules, have the
right to attend, participate and vote in the general meeting. A shareholder or shareholders
holding not less than 5% of the nominal value of all the shares entitled to vote at the General
Meeting may request the Company to include items on the agenda of a General Meeting and /
or table draft resolutions for items included in the agenda of a general meeting. Such requests
are to be received by the Company at least forty-six days before the date set for the relative
General Meeting.
A shareholder who cannot participate in the General Meeting can appoint a proxy by written
or electronic notification to the Company. Every shareholder represented in person or by
proxy is entitled to ask questions which are pertinent and related to items on the agenda of the
General Meeting and to have such questions answered by the Directors or such persons as the
Directors may delegate for that purpose.
In 2025 the Company held its AGM on 30 April to enable active participation by all those
having an interest in doing so and to allow the shareholders proper opportunity to engage
with the Company Directors and members of Management.
Signed by Martin Galea (Chairman) and Antoinette Caruana (Director) on the 24 March
2026.
29
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Remuneration Statement and Report of the Remuneration Committee to
the Shareholders
1. Terms of Reference and Membership
In accordance with Section 8A of The Code of Principles of Good Corporate Governance
(Appendix 5.1 of the Capital Markets Rules under Chapter 5 on Continuing Obligations), the
Remuneration Committee ('the Committee') of MAPFRE Middlesea p.l.c. ('MMS' or 'the
Company') hereby submits its Remuneration Statement and Report to the shareholders of
MMS.
The Committee’s main task, in accordance with its Terms of Reference, is to ensure that the
MMS Remuneration Policy is implemented and to propose appropriate remuneration
packages for Directors and Chief Officers in accordance therewith. The Remuneration
Committee also monitors the level and structure of the remuneration packages for Directors
and Chief Officers based on the information presented by Management from time to time.
As at 1 January 2025, the Committee Members were Antoinette Caruana (Chairperson),
Martin Galea and Gordon Cordina. These individuals stood for re-election as Directors at the
Company's Annual General Meeting ("AGM") held on the 30 April 2025 and, at the Board
meeting held directly after the AGM, the said individuals were again appointed as members
of the Remuneration Committee. Antoinette Caruana was once again appointed Chairperson.
All the Committee Members are non-Executive Directors of MMS with no personal financial
interest as recommended by Code provision 8.A.1.
The MMS President & Chief Executive Officer ("CEO"), Etienne Sciberras, the MAPFRE
MSV Life p.l.c (MMSV) Chief Executive Officer, Elvira Lopez de Lara Merida and
Loredana Mallia, in her capacity as Chief Officer Human Resources for both companies
replacing Ines Silva as from 20 January 2025, were invited to attend the Committee meetings
held throughout the year. The Company Secretary, Dr Daphne Sims Dodebier, acted as the
Secretary to the Committee.
Code provision 8.A.1 recommends that an independent non-Executive Director (NED) chair
the Committee and indeed Antoinette Caruana is an independent NED. Nonetheless, the
Committee takes decisions by the unanimous agreement of its Members further to open and
transparent discussions.
30
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Remuneration Statement and Report of the Remuneration Committee to
the Shareholders - continued
2. Meetings
The Remuneration Committee held three meetings during the period under review and the
attendance was as follows:
Member Attended
Antoinette Caruana (Chairperson) 3
Gordon Cordina 3
Martin Galea 3
The Committee determined and/or discussed the following matters:
• Gender & Cultural Diversity;
• Senior Management Appointments:
• HR Policies & Legislative Developments;
• Training & Development;
• Proposed Performance Bonus Pay-Out for FY2024 & Salary increase for 2025;
• 2025 Management by Objectives Variable remuneration framework;
• Collective Agreement Amendments;
• Implementation of the Transformational Leadership Programme;
• Succession Planning;
• Outcome of the eNPS 2025 Survey;
3. Remuneration Statement
a. Remuneration Policy - Senior Management
The MMS Remuneration (also sometimes referred to as Compensation) Policy framework is
set by the Board of Directors acting through the Remuneration Committee. It is based on the
guidelines and principles contained within the MAPFRE Group Compensation Policy which
was most recently approved by the majority of shareholders during the MAPFRE Middlesea
p.l.c Annual General Meeting held on 30 April 2025.
The Committee reviews and approves the individual remuneration arrangements for Senior
Management, namely, the CEO, the Chief Financial Officer, the Company Secretary, the
Chief Officers and the Internal Auditor.
The Committee has access to both internal and independent external advice on remuneration
matters as and when required.
31
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Remuneration Statement and Report of the Remuneration Committee to
the Shareholders - continued
3. Remuneration Statement - continued
a. Remuneration Policy – Senior Management - continued
The Committee deems the current Senior Management remuneration packages to be in line
with the local market equivalents and holds them to be fair, reasonable and commensurate to
the responsibilities involved. The Committee also believes that the remuneration packages
are such as to enable the Company to attract, retain and motivate employees having the
appropriate skills and qualities to ensure the proper management of the organisation. This
was also confirmed by the outcome of the benchmarking exercise commissioned by the
Human Resources Area during 2025.
There have been no significant changes to the Company’s Remuneration Policy for Senior
Management during the financial year under review. The Pension Scheme implemented in
the second half of Financial Year 2022 continues with good take up from employees.
As previously explained, the Pension Scheme is voluntary and intended to provide employees
with an opportunity to build up their retirement savings during their employment. All
employees of the Company, including Senior Management, but excluding Directors, are
eligible to be enrolled in the Pension Scheme, provided that they have been in employment
with the Company for at least two years. The limitation was updated as from 1 January 2026
in that employees now become eligible upon completion of their probation period. Those
employees who opt to participate in the Pension Scheme, determine their own monthly
contribution between the minimum and maximum amounts established by the Pension
Scheme’s Terms and Conditions. In return, the Company then makes contributions into the
accounts of these employees who would have opted to participate in the Pension Scheme and
contributes twice the amount contributed by the employee subject to a maximum based on
duration of service, which is also established in the Pension Scheme’s Terms and Conditions.
Please refer to Note 11 in the Financial Statements for further information with regard to the
contribution made by the Company for Financial Year 2025 relative to the said Scheme.
The performance appraisal system underpinning the Company’s remuneration structure as
implemented in 2013 and the performance bonus scheme implemented in 2014 also
continued to apply in 2025 with the latter being reviewed and further enhanced as necessary
on an annual basis.
The said performance bonus scheme is still based on the achievement of Group, Company
and Departmental objectives and was further enhanced in 2019 to give some weight to the
adherence to Corporate Values although the weightings were modified for Financial Year
2025. Furthermore, in Financial Year 2020 the performance appraisal system was upgraded
to a new tool which allows for the generation of 360 degree feedback between peers and
internal clients and continuous communication between employees and their direct managers
throughout the year making the performance evaluation more holistic. This continued to
apply during 2025.
32
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Remuneration Statement and Report of the Remuneration Committee to
the Shareholders - continued
3. Remuneration Statement - continued
a. Remuneration Policy – Senior Management - continued
The terms and conditions of employment for Senior Management are set out in their
respective contracts of employment. In principle, these contracts do not contain provisions
for termination payments or other amounts linked to early termination nor have there been
any cases of early termination in practice. Share options, pension benefits and profit sharing
are not part of the MMS Remuneration Policy for Senior Management. Indeed Senior
Management, is not entitled to any compensation of a variable nature except the performance
bonuses set out hereunder.
The MMS CEO is eligible for an annual bonus entitlement calculated with reference to the
attainment of pre-established objectives and targets as recommended by the Remuneration
Committee and approved by the Board of Directors.
Insofar as the performance bonus for Senior Management as aforementioned, this is
calculated in accordance with the percentage achievement of the Group and Departmental
objectives referred to above. The performance bonus is inter alia approved by the
Remuneration Committee and determined in accordance with the performance appraisal
process. No supplementary pension or other pension benefits are payable to Senior
Management. Additionally, in 2022, a right of clawback was introduced in the Remuneration
Policy for Key Staff where, if the relevant Variable Remuneration attains one of two
quantitative criteria, 30% of the applicable Variable Remuneration would be deferred over
three years to provide for the potential of such clawback.
The Remuneration Committee remains of the opinion that the proportion of fixed
remuneration and performance bonus is reasonable and appropriate for both the MMS CEO
specifically and for Senior Management generally.
Non-cash benefits to which Senior Management are entitled include the use of a company car
and health insurance. The death-in-service benefit also forms part of the non-cash benefits
and the same terms are applicable to all other Company employees.
Total emoluments and compensation received by Senior Management during Financial Year
2025 are deemed to be of a commercially sensitive nature and are thus not being disclosed in
this Report in line with Code Provision 8.A.6.
b. Remuneration Policy – Directors
The MMS Remuneration (also sometimes referred to as Compensation) Policy framework as
aforementioned also extends to the compensation paid to Board members.
33
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Remuneration Statement and Report of the Remuneration Committee to
the Shareholders - continued
3. Remuneration Statement - continued
b. Remuneration Policy – Directors - continued
As at 31 December 2025, the Board of Directors of MAPFRE Middlesea p.l.c. was composed
of eight non-Executive directors and one Executive Director. Three Directors, namely
Eduardo Perez de Lema, Jose-Luis Jimenez and Jose Maria del Pozo, did not receive a fee in
accordance with the established policy of the MAPFRE Group with which they are employed
and which appointed them for the period January 2025 until they stepped down at the AGM
held on 30 April 2025. Jose Maria del Pozo was re-elected as a Director at the said AGM and
the same principle continued to apply in relation to him and to Javier Moreno Gonzalez and
Elvira Lopez de Lara Merida who were newly appointed to the Board for the period May to
December 2025.. Etienne Sciberras also did not receive a fee since during Financial Year
2025 he occupied the position of Chief Executive Officer of the Compan y.
Based on the recommendations of the Committee, the current Directors’ fees, for each
Director as applicable, and as approved by the Board are as follows:
Directors’ Fees including Board Committees as applicable
Chairman€60,000 per annum (2024: €60,000)
Other Directors (per Director)€40,000 per annum (2024: €40,000)
Audit Committee Fees
Chairman€7,000 per annum (2024: €7,000)
Member (per member)€5,000 per annum (2024: €5,000)
Subsidiary Fees
Chairman€7,000 per annum (2024: €7,000)
Member (per member)€5,000 per annum (2024: €5,000)
None of the Company’s Directors had any service contracts with either the Company or any
of its subsidiaries as at the end of the Financial Year.
Directors’ emoluments are established to reflect the responsibility and time committed by
Directors to the affairs of the Company, including the Board Committees of which a Director
may be a member save for the Audit Committee that is additionally remunerated as detailed
above. None of the Directors, in their capacity as Director of the Company and/or Committee
members, are entitled to profit sharing, share options, pension benefits, participation in the
Employee Pension Scheme or any other remuneration.
34
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Remuneration Statement and Report of the Remuneration Committee to
the Shareholders - continued
3. Remuneration Statement - continued
c.Code Provision 8.A.5
Directors' Emoluments 2025

Fixed Remuneration | Variable Remuneration | Share Options | Others
€247,000 | None | None | None

Fees payable to directors in respect of 2025 amounted in total to €247,000 (2024: €249,753).
Remuneration received by directors from companies within the Group (in addition to the
above fees) is set out in section d. Code Provision 12.26k below.
The emoluments of Senior Management are not being disclosed in line with Code Provision
8.A.6 since these are deemed to be of a commercially sensitive nature. This decision will
continue to be reviewed on an annual basis.
d.Code Provision 12.26K
In addition to the information provided above and with reference to Appendix 12.1 of the
Capital Markets Rules it is noted that the maximum annual aggregate emoluments payable to
the Directors in their capacity as Board members that may be paid to them are approved by
the shareholders in the General Meeting in terms of Article 81 of the Company’s Articles of
Association. This amount was established by the Board of Directors after consultation with
the MAPFRE Group and based on the guidelines as set forth in the Compensation Policy
relative to the fixing of compensation for the members of the governance bodies having
regard to the Company’s financial situation, profitability and sustainability. The maximum
annual aggregate amount was then confirmed in the total sum of €350,000 per annum at the
forty-third Annual General Meeting held on the 30 April 2025, which has remained
consistent since 2018.
The amount paid to each Director by the Company for attendance at meetings of the Board or
of the Board Committees, when due as explained above, is not tied to the Company’s
performance or other performance criteria but is a pre-determined, fixed annual amount as
indicated below:
35
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Remuneration Statement and Report of the Remuneration Committee to the Shareholders - continued
3. Remuneration Statement - continued
d.Code Provision 12.26K - continued

Non-Executive Directors | 2025 Fees € | 2024 Fees € | Percentage Annual Change of Remuneration * %
|  |  | 2024 - 2025 | 2023-2024 | 2022-2023 | 2021-2022 | 2020-2021
Martin Galea (NED & Board Chairman) | 65,000 | 65,000 | 0.00 | 0.00 | -10.55 | 4.81 | 1.96
Antoinette Caruana (NED) | 45,000 | 45,003 | 0.00 | 0.00 | 0.00 | 4.65 | 0.00
Gordon Cordina (NED)1 | 50,000 | 50,000 | 0.00 | -12.28 | 0.00 | n/a | n/a
Jose Maria del Pozo (NED) | nil | nil | n/a | n/a | n/a | n/a | n/a
Jose Luis Jimenez (NED until 30 April 2025) | nil | nil | n/a | n/a | n/a | n/a | n/a
Javier Moreno Gonzalez (NED from 30 April 2025)2 | nil | nil | (81.85) | n/a | n/a | n/a | n/a
Elvira Lopez de Lara Merida (NED from 30 April 2025)3 | nil | nil | n/a | n/a | n/a | n/a | n/a
Eduardo Perez de Lema (NED until 30 April 2025) | nil | nil | n/a | n/a | n/a | n/a | n/a
Godfrey Swain (NED) | 47,000 | 49,750 | (12.15) | 2.88 | n/a | n/a | n/a
Paul Testaferrata Moroni Viani (NED) | 40,000 | 40,000 | 0.00 | 0.00 | 0.00 | 0.00 | (6.98)
Total | 247,000 | 249,753 |  |  |  |  |

1 The amount includes €50,000 paid to Dr Gordon Cordina as Chairman of the subsidiary Board.
36
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Remuneration Statement and Report of the Remuneration Committee to
the Shareholders - continued
3. Remuneration Statement - continued
d.Code Provision 12.26K - continued
2 Whilst there were no directors fees for 2025 and 2024, total emoluments for 2024 paid to Mr
Javier Moreno Gonzalez in his then position of CEO of MAPFRE Middlesea p.l.c. amounted
to €706,657 as was disclosed in the Annual report for 2024. In relation to his emoluments for
2024, a further 4,508 shares in MAPFRE S.A. (10% of the entitlement) having a value of
€16,770 were delivered on the 20 March 2026 the value of which was determined by the
closing price on 18 March 2026. The value of the remaining 20% (9,016 shares in MAPFRE
S.A.) will be determined based on the share price when such shares will be delivered over the
coming two years. During 2025 further variable emoluments became payable in relation to
his time as CEO of MAPFRE Middlesea plc amounting to €128,243 of which €52,500
payable in cash and the remaining through the delivery of 20,361 shares MAPFRE S.A.
shares, being 70% of the share entitlement, that were delivered on the 20 March 2026 the
value of which was determined by the closing price on 18 March 2026 of €3.72. The amount
does not include the value of 8,724 shares in MAPFRE S.A. whose value will only be
determined when such shares will be delivered over the coming two years. The 81.85%
decrease in emoluments is due to the change in roles of Javier Moreno Gonzalez from
President & CEO to a Non-Executive Director (the percentage changes for the previous five
years are set out in the table named Performance Indicators - Remuneration of Company's
President & CEO).
3 Total emoluments for 2025 paid to Ms Elvira Lopez de Lara Merida as CEO of MAPFRE
MSV Life amounted to €436,539. This amount included €15,155 being the value of 4,074
MAPFRE S.A. shares, being 70% of the share entitlement, that were delivered on the 20
March 2026 the value of which was determined by the closing price on 18 March 2026 of
€3.72. The amount does not include the value of 1,743 shares in MAPFRE S.A. whose value
will only be determined when such shares will be delivered over the coming two years.
* Percentage annual change of remuneration were based on annualised remuneration for the
years compared, as applicable, to allow for a meaningful comparison.
Remuneration paid to Directors as shown in the above table are all fixed in nature and thus
the ratio of fixed and variable remuneration was 100%-0% for both years being reported. The
changes in the total remuneration of Non-Executive Directors is to be considered together
with the information included in the table, further down in this report, reflecting the
comparatives between the percentage annual change of CEO remuneration relative to the
Company performance metrics and percentage annual change of the Company’s employees’
average remuneration employed on a full-time basis equivalent.
None of the Directors and Members of the Board Committees held any service contracts with
the Company or any of its subsidiary undertakings and no Director is entitled to share
options, profit sharing, pension benefits or any other type of emoluments save for the
provision of cover under a Group Life scheme. It is also confirmed that no other fees were
37
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
payable or paid to any of the Directors or Committee Members during the financial year
under review.
Remuneration Statement and Report of the Remuneration Committee to
the Shareholders - continued
3. Remuneration Statement - continued
d.Code Provision 12.26K - continued
By reference to Capital Markets Rule 12.2A no other person is deemed to be in charge of the
operations or the activities of the Company, and thus fall within the definition of director,
beyond the members of the Board and the Chief Executive Officer.
In this respect and relative to Appendix 12.1 the total emoluments paid by the Company to
the Chief Executive Officer in office during Financial Year 2025 were as follows:

| 2025
| €
President & CEO |
Etienne Sciberras |
Fixed Salary | 220,513
Defined pension contribution | 5,300
Other fringe benefits | 9,047
Total Fixed remuneration | 234,860
Variable remuneration |
In cash * | 125,448
In MAPFRE S.A. shares (6,788 shares)** | 25,251
Total variable remuneration | 150,699
Total remuneration *** | 385,559
Fixed variable proportion | 61%-39%

* The amount is 70% paid immediately after the respective financial year with the remaining
30% being settled in three equal installments in the following three years.
** The amount is for the 70% of the shares entitlement that were delivered on the 20 March
2026 the value of which was determined by the closing price on 18 March 2026 of €3.72. The
value of the remaining 30% (2,907 shares in MAPFRE S.A.) will be determined based on the
share price when such shares will be delivered over the coming three years.
38
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Remuneration Statement and Report of the Remuneration Committee to
the Shareholders - continued
3. Remuneration Statement - continued
d.Code Provision 12.26K - continued
*** Total emoluments for 2024 paid to Mr Etienne Sciberras as CEO of MAPFRE MSV Life
amounted to €381,492. This amount included €60,959 being the value of 21,035 MAPFRE
S.A. shares, being 70% of the share entitlement, that were delivered on the 20 March 2025
the value of which was determined by the closing price on 19 March 2025 of €2.898. A
further 3,005 shares in MAPFRE S.A. (10% of the entitlement) having a value of €11,179
were delivered on the 20 March 2026 the value of which was determined by the closing price
on 18 March 2026.The amount does not include the value of 6,010 shares in MAPFRE S.A.
whose value will only be determined when such shares will be delivered over the coming two
years. During 2025 further variable emoluments became payable in relation to his time as
CEO of MAPFRE MSV Life amounting to €85,495 of which €35,000 payable in cash and the
remaining through the delivery of 13,574 shares MAPFRE S.A. shares, being 70% of the
share entitlement, that were delivered on the 20 March 2026 the value of which was
determined by the closing price on 18 March 2026 of €3.72. The amount does not include the
value of 5,817 shares in MAPFRE S.A. whose value will only be determined when such
shares will be delivered over the coming two years.
In respect of Variable Remuneration, deferred or otherwise, paid or pending payment, a
partial or total reduction is possible if particular circumstances arise including in the event of
a restatement of annual accounts other than resulting from a change in legislation and in the
event of fraud. No such occurrence took place in 2025.
Variable remuneration for the CEO is based on Global, Regional and Country results together
with Country premium written targets, with the highest weighting given to the Country
results and premiums respectively. The main objective of the Group is profitable growth and
the targets are aligned with such objectives. As part of a Global Group it is expected that as a
Country we contribute towards the profitability of both the Region and the Global Group
results and accordingly part of the variable remuneration is attached to the achievement of the
higher Group results. The achievement percentage follows a set scale going from complete
non-achievement, to pro-rata if not fully achieved, to accelerated achievement if targets are
exceeded. These scales are in line with the Remuneration Policy and approved accordingly
by the Remuneration Committee and by the AGM.
In terms of the requirements within Appendix 12.1 of the Capital Markets Rules, the
following table presents the annual change of remuneration of the CEO, of the Company’s
performance, and of average remuneration on a full-time equivalent basis of the Company’s
employees over the four most recent financial years:
39
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Remuneration Statement and Report of the Remuneration Committee to
the Shareholders - continued
3. Remuneration Statement - continued
d.Code Provision 12.26K - continued

Performance indicators | % Difference FY2025- FY2024 | % Difference FY2024- FY2023 | % Difference FY2023- FY2022 | % Difference FY2022- FY2021 | % Difference FY2021- FY2020
Company's profit after tax | 62.59%* | 6.45% | 59.86% | 45.30% | (36.64)%
Company's gross premium written | 9.57% | 8.27% | 9.88% | 8.75% | 6.64%
Remuneration of Company's President & CEO ** | n/a | 44.60% | 8.73% | (2.98)% | 1.90%
Company's employees' average remuneration on full time equivalent | 1.53% | 6.98% | 1.34% | 3.39% | 6.44%
Group's employees' average remuneration on full time equivalent | 2.96% | 4.29% | 2.90% | 3.01% | 5.54%

* The increase arose mainly from a 32.8% increase in Insurance Service Result and €1.50
million net dividend received from MAPFRE MSV Life p.l.c. in 2025 (2024: €1.00 million)
and a net dividend of €1.00 million received from BEE Insurance Management Limited with
no comparative.
** As 2025 was the first year of Mr Etienne Sciberras as President & CEO of the Company a
percentage change could not be computed. The comparative figures for the previous four
years all related to the previous President & CEO Mr Javier Moreno Gonzalez.
In terms of the requirements within Appendix 12.1 (f) there has been no deviation from the
procedure for the implementation of the remuneration policy as defined in Chapter 12 of the
Capital Markets Rules.
As required by provision 12.26N of the Capital Markets Rules the Company’s auditors have
verified that the information that needs to be included in the Remuneration Report as per
Chapter 12 and Appendix 12.1 of the Capital Markets Rules, has been included.
Signed by Antoinette Caruana (Director and Remuneration Committee Member) on 24
March 2026.
40
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Statement of profit or loss

|  | Year ended 31 December
|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
| Notes | €’000 | €’000 | €’000 | €’000
Insurance revenue | 7 | 155,678 | 146,692 | 109,693 | 99,922
Insurance service expenses | 7 | (114,123) | (112,029) | (83,475) | (78,496)
Net expenses from reinsurance contracts held | 7 | (13,086) | (11,840) | (9,837) | (9,096)
Insurance service result | 7 | 28,469 | 22,823 | 16,381 | 12,330
Interest revenue calculated using the effective interest method |  | 4,612 | 5,440 | 526 | 355
Other investment revenue |  | 88,778 | 98,141 | 4,230 | 2,245
Net credit impairment losses |  | 62 | 9 | 5 | 1
Net investment return | 8 | 93,452 | 103,590 | 4,761 | 2,601
Net change in investment contract liabilities | 8 | (7,052) | (13,131) | — | —
Finance expense from insurance contracts issued | 8 | (82,466) | (83,192) | (364) | (818)
Finance income/(expense) from reinsurance contracts held | 8 | 2,157 | (515) | 94 | 182
Net financial result |  | (87,361) | (96,838) | (270) | (636)
Net insurance and investment results |  | 34,560 | 29,575 | 20,872 | 14,295
Other income | 9 | 1,707 | 1,282 | — | —
Other operating expenses |  | (6,649) | (6,053) | (4,000) | (3,764)
Profit before tax |  | 29,618 | 24,804 | 16,872 | 10,531
Tax expense | 12 | (9,104) | (6,810) | (5,297) | (3,412)
Profit for the year |  | 20,514 | 17,994 | 11,575 | 7,119
Attributable to: |  |  |  |  |
- owners of the Company |  | 14,935 | 12,519 | 11,575 | 7,119
- non-controlling interests |  | 5,579 | 5,475 | — | —
|  | 20,514 | 17,994 | 11,575 | 7,119

T he Notes on pages 48 to 206 are an integral part of these financial statements.
41
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025

Statement of profit or loss and other comprehensive income
|  | Year ended 31 December
|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
| Notes | €’000 | €’000 | €’000 | €’000
Profit for the financial year |  | 20,514 | 17,994 | 11,575 | 7,119
Other comprehensive income: |  |  |  |  |
Items that are or may be reclassified subsequently to profit or loss |  |  |  |  |
Net change in fair value of investments measured at FVOCI | 29 | 6 | 163 | (5) | 159
Investments measured at FVOCI reclassified to profit or loss on disposal | 29 | 51 | — | 51 | —
Revaluation gain on freehold land and buildings |  | 444 | — | 183 | —
Items that will not be reclassified to profit or loss |  |  |  |  |
Re-measurement actuarial gain/(loss) on provision for other liabilities and charges |  | 5 | (5) | 5 | (5)
Total other comprehensive income, net of tax |  | 506 | 158 | 234 | 154
Total comprehensive income for the year |  | 21,020 | 18,152 | 11,809 | 7,273
Attributable to: |  |  |  |  |
- owners of the Company |  | 15,441 | 12,677 |  |
- non-controlling interests |  | 5,579 | 5,475 |  |
Total comprehensive income for the year |  | 21,020 | 18,152 |  |

Items disclosed in the statement above are disclosed net of tax.
The Notes on pages 48 to 206 are an integral part of these financial statements.
42
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Statement of financial position

| Notes | Group | Company
|  | As at 31 December | As at 31 December
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
ASSETS |  |  |  |  |
Intangible assets | 16 | 36,768 | 34,411 | 11,080 | 10,573
Property and equipment | 18 | 16,193 | 17,115 | 3,880 | 4,063
Right-of-use assets |  | 2,027 | 1,702 | 1,930 | 1,616
Investment properties | 19 | 107,125 | 105,806 | 13,519 | 13,712
Investment in associated undertakings | 21 | 388 | 5,226 | 388 | 399
Investment in subsidiary undertakings | 20 | — | — | 76,119 | 77,214
Other investments | 22 | 2,230,707 | 2,159,560 | 25,188 | 19,086
Deferred income tax asset | 23 | 2,398 | 2,532 | 1,223 | 1,248
Insurance contract assets | 24 | 4,484 | 7,080 | — | —
Reinsurance contract assets | 24 | 11,122 | 11,815 | 11,122 | 11,815
Trade and other receivables | 26 | 27,435 | 24,457 | 23,372 | 19,693
Current income tax receivable |  | 1,861 | 2,290 | — | —
Cash and cash equivalents | 27 | 50,244 | 81,899 | 14,559 | 13,908
Total assets |  | 2,490,752 | 2,453,893 | 182,380 | 173,327
EQUITY |  |  |  |  |
Capital and reserves attributable to owners of the Company |  |  |  |  |
Share capital | 28 | 19,320 | 19,320 | 19,320 | 19,320
Share premium account |  | 688 | 688 | 688 | 688
Other reserves | 29 | 1,301 | 800 | 34,941 | 34,712
Retained earnings |  | 85,684 | 75,538 | 36,508 | 29,722
|  | 106,993 | 96,346 | 91,457 | 84,442
Non-Controlling Interest |  | 91,248 | 87,169 | — | —
Total equity |  | 198,241 | 183,515 | 91,457 | 84,442
LIABILITIES |  |  |  |  |
Deferred income tax liabilities | 23 | 15,106 | 14,340 | 2,702 | 2,565
Provisions for other liabilities and charges |  | 838 | 889 | 838 | 889
Insurance contract liabilities | 24 | 2,004,641 | 2,027,446 | 75,737 | 72,968
Investment contract liabilities | 25 | 229,748 | 179,685 | — | —
Reinsurance contracts liabilities | 24 | 15,225 | 17,073 | — | —
Derivative financial instruments | 22 | 638 | 6,816 | — | —
Lease liabilities |  | 2,146 | 1,790 | 2,052 | 1,694
Other payables | 30 | 22,269 | 19,899 | 8,501 | 9,134
Current income tax liabilities |  | 1,900 | 2,440 | 1,093 | 1,635
Total Liabilities |  | 2,292,511 | 2,270,378 | 90,923 | 88,885
Total equity and liabilities |  | 2,490,752 | 2,453,893 | 182,380 | 173,327

The Notes are an integral part of these financial statements.
These financial statements on pages 40 to 206 were approved by the Board of Directors and
authorised for issue on 24 March 2026 and signed on its behalf by Martin Galea (Chairman) and
Godfrey Swain (Director) as per the Directors' Declaration on ESEF Annual Financial report
submitted in conjunction with the Annual Report 2025.
43
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Statement of changes in equity

Group |  |  |  |  |
|  | Attributable to owners of the Company |  |
|  | Share capital | Share premium account | Other reserves | Retained earnings | Total | Non- controlling interests | Total equity
| Notes | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000
Balance as at 1 January 2024 |  | 19,320 | 688 | 637 | 67,524 | 88,169 | 82,694 | 170,863
Comprehensive income |  |  |  |  |  |  |  |
Profit for the year |  | — | — | — | 12,519 | 12,519 | 5,475 | 17,994
Other comprehensive income: |  |  |  |  |  |  |  |
Net gain in fair value of investments measured at FVOCI | 29 | — | — | 163 | — | 163 | — | 163
Re-measurement actuarial loss on provision for other liabilities and charges |  | — | — | — | (5) | (5) | — | (5)
Total other comprehensive income, net of tax |  | — | — | 163 | (5) | 158 | — | 158
Total comprehensive income |  | — | — | 163 | 12,514 | 12,677 | 5,475 | 18,152
Transactions with owners |  |  |  |  |  |  |  |
Dividends for 2023 |  | — | — | — | (4,500) | (4,500) | (1,000) | (5,500)
Total transactions with owners |  | — | — | — | (4,500) | (4,500) | (1,000) | (5,500)
Balance as at 31 December 2024 |  | 19,320 | 688 | 800 | 75,538 | 96,346 | 87,169 | 183,515

44
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Statement of changes in equity - continued

Group - continued |  |  |  |  |
|  | Attributable to owners of the Company |  |
|  | Share capital | Share premium account | Other reserves | Retained earnings | Total | Non- controlling interests | Total equity
| Notes | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000
Balance as at 1 January 2025 |  | 19,320 | 688 | 800 | 75,538 | 96,346 | 87,169 | 183,515
Comprehensive income |  |  |  |  |  |  |  |
Profit for the year |  | — | — | — | 14,935 | 14,935 | 5,579 | 20,514
Other comprehensive income: |  |  |  |  |  |  |  |
Net gain in fair value of investments measured at FVOCI | 29 | — | — | 6 | — | 6 | — | 6
FVOCI investments - reclassified to profit or loss |  | — | — | 51 | — | 51 | — | 51
Revaluation gain on freehold land and buildings |  | — | — | 444 | — | 444 | — | 444
Re-measurement actuarial gain on provision for other liabilities and charges |  | — | — | — | 5 | 5 | — | 5
Total other comprehensive income, net of tax |  | — | — | 501 | 5 | 506 | — | 506
Total comprehensive income |  | — | — | 501 | 14,940 | 15,441 | 5,579 | 21,020
Transactions with owners |  |  |  |  |  |  |  |
Write-back of prior year dividends |  | — | — | — | 6 | 6 | — | 6
Dividends for 2024 | 15 | — | — | — | (4,800) | (4,800) | (1,500) | (6,300)
Total transactions with owners |  | — | — | — | (4,794) | (4,794) | (1,500) | (6,294)
Balance as at 31 December 2025 |  | 19,320 | 688 | 1,301 | 85,684 | 106,993 | 91,248 | 198,241

The Notes on pages 48 to 206 are an integral part of these financial statements.
45
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Statement of changes in equity - continued

Company |  |  |  |  |  |
|  |  | Share |  |  |
|  | Share | premium | Other | Retained |
|  | capital | account | reserves | earnings | Total
| Notes | €’000 | €’000 | €’000 | €’000 | €’000
Balance as at 1 January 2024 |  | 19,320 | 688 | 34,553 | 27,108 | 81,669
Comprehensive income |  |  |  |  |  |
Profit for the financial year |  | — | — | — | 7,119 | 7,119
Other comprehensive income: |  |  |  |  |  |
Net gain in fair value of investments measured at FVOCI | 29 | — | — | 159 | — | 159
Re-measurement actuarial loss on provision for other liabilities and charges |  | — | — | — | (5) | (5)
Total other comprehensive income, net of tax |  | — | — | 159 | (5) | 154
Total comprehensive income |  | — | — | 159 | 7,114 | 7,273
Transactions with owners |  |  |  |  |  |
Dividend for 2023 |  | — | — | — | (4,500) | (4,500)
Total transactions with owners of the Company |  | — | — | — | (4,500) | (4,500)
Balance as at 31 December 2024 |  | 19,320 | 688 | 34,712 | 29,722 | 84,442

46
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Statement of changes in equity - continued

Company - continued |  |  |  |  |  |
|  |  | Share |  |  |
|  | Share | premium | Other | Retained |
|  | capital | account | reserves | earnings | Total
| Notes | €’000 | €’000 | €’000 | €’000 | €’000
Balance as at 1 January 2025 |  | 19,320 | 688 | 34,712 | 29,722 | 84,442
Comprehensive income |  |  |  |  |  |
Profit for the financial year |  | — | — | — | 11,575 | 11,575
Other comprehensive income: |  |  |  |  |  |
Net loss in fair value of investments measured at FVOCI | 29 | — | — | (5) | — | (5)
FVOCI investments - reclassified to profit or loss |  | — | — | 51 | — | 51
Revaluation gain on freehold land and buildings |  | — | — | 183 | — | 183
Re-measurement actuarial gain on provision for other liabilities and charges |  | — | — | — | 5 | 5
Total other comprehensive income, net of tax |  | — | — | 229 | 5 | 234
Total comprehensive income |  | — | — | 229 | 11,580 | 11,809
Transactions with owners |  |  |  |  |  |
Write-back of prior year dividends |  | — | — | — | 6 | 6
Dividend for 2024 | 15 | — | — | — | (4,800) | (4,800)
Total transactions with owners of the Company |  | — | — | — | (4,794) | (4,794)
Balance as at 31 December 2025 |  | 19,320 | 688 | 34,941 | 36,508 | 91,457

The Notes on pages 48 to 206 are an integral part of these financial statements.
47
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Statement of cash flows

|  | Year ended 31 December
|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
| Notes | €’000 | €’000 | €’000 | €’000
Cash flows from operating activities |  |  |  |  |
Cash (used in)/generated from operations | 3 1 | (20,721) | (47,789) | 14,618 | 14,949
Dividends received |  | 24,587 | 18,328 | 3,643 | 1,502
Interest received |  | 32,031 | 28,384 | 315 | 198
Income tax paid |  | (8,365) | (10,671) | (5,675) | (3,669)
Net cash generated from/(used in) operating activities |  | 27,532 | (11,748) | 12,901 | 12,980
Cashflow from investing activities |  |  |  |  |
Sale of associated undertaking |  | 7,528 | 20,800 | — | —
Sale of a subsidiary undertaking |  | — | — | 1,095 | —
Purchase of investment property | 19 | (1,367) | (934) | (73) | (100)
Disposal of investment property |  | 317 | 1 | 317 | 1
Purchase of financial investments |  | (935,618) | (1,444,839) | (14,058) | (6,180)
Disposal of financial investments |  | 884,922 | 1,485,885 | 8,377 | 3,910
Purchase of property, plant and equipment and intangible assets |  | (8,675) | (9,741) | (3,114) | (2,983)
Net cash (used in)/generated from investing activities |  | (52,893) | 51,172 | (7,456) | (5,352)
Cash flows from financing activities |  |  |  |  |
Dividends paid to owners of the Company |  | (4,794) | (4,500) | (4,794) | (4,500)
Dividends paid to minority interests |  | (1,500) | (1,000) | — | —
Cash used in financing activities |  | (6,294) | (5,500) | (4,794) | (4,500)
Net movement in cash and cash equivalents |  | (31,655) | 33,924 | 651 | 3,128
Movement in cash and cash equivalents |  |  |  |  |
Cash and cash equivalents at beginning of year |  | 81,899 | 47,975 | 13,908 | 10,780
Cash and cash equivalents at end of year | 27 | 50,244 | 81,899 | 14,559 | 13,908

The Notes on pages 48 to 206 an integral part of these financial statements.
48
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
Notes to the financial statements
1. Basis of preparation
The financial statements of MAPFRE Middlesea p.l.c. are prepared in accordance with
International Financial Reporting Standards as adopted for use in the European Union
and the Companies Act, 1995. The financial statements of the Group to which the
Company is parent are prepared in accordance with Article 4 of Regulation (EC)
1606/2002 on the application of international accounting standards (the “Regulation”)
which requires that, for each financial period starting on or after 1 January 2005,
companies governed by the law of an EU Member State shall prepare their consolidated
financial statements in conformity with IFRS as adopted by the EU if, at their reporting
date, their securities are admitted to trading on a regulated market of any EU Member
State. The Regulation prevails over the provisions of the Companies Act, 1995 to the
extent that the said provisions of the Companies Act, 1995 are incompatible with the
provisions of the Regulation. Both sets of financial statements as referred to in the
Annual Report relate to both those of the Company and the Group and have also been
prepared in accordance with the Insurance Business Act, 1998.
The financial statements are prepared under the historical cost convention as modified
by the revaluation of property, investment property and financial assets and financial
liabilities (including derivatives) at fair value through profit or loss (FVTPL) or at fair
value through other comprehensive income (FVOCI). Investment in associated
undertaking is measured using equity method, that is, cost plus or minus net income or
loss of associate.
The preparation of financial statements in conformity with the above reporting
framework requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s
accounting policies. The areas involving a higher degree of judgement or complexity,
or areas where assumptions and estimates are significant to the consolidated financial
statements, are disclosed in Note 3.
The statement of financial position is organised in increasing order of liquidity, with
additional disclosures on the maturity analysis of the Group’s assets and liabilities
provided within the Notes to the financial statements. All amounts in the Notes are
shown in thousands of euro, rounded to the nearest thousand, unless otherwise stated.
Amendments to published standards effective in 2025
In 2025, the Group adopted amendments to existing standards that are mandatory for
the Group’accounting period beginning on 1 January 2025. The adoption of these
amendments to standards as per the requirements of IFRSs as adopted by the EU did
not result in material changes to the Group’s accounting policies.
49
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
1.Basis of preparation - continued
Standards and amendments to published standards that are not yet effective
A number of new standards and amendments to existing standards are effective for
annual periods beginning after 1 January 2025. However, the Group has not early
adopted the new standards or amendments in preparing these financial statements and
management are of the opinion that there are no requirements that are expected to have
a material impact on the Group’s financial statements in the period of initial application.
2.Accounting policies
The material accounting policies adopted in the preparation of these consolidated
financial statements are set out below. These policies have been consistently applied to
all the years presented, unless otherwise state d.
2.1 Consolidation
(a) Subsidiary undertakings
The consolidated financial statements incorporate the assets, liabilities and results of
the Company and its subsidiary undertakings drawn up to 31 December each year.
Subsidiary undertakings are those companies over which the Group has control, either
by way of majority shareholding, through contractual agreements with the other vote
holders of the investee or rights arising from other contractual agreements, giving it the
power to govern the financial and operating policies of the investee. Specifically, the
Group controls an investee if and only if the Group has:
– Power over the investee (i.e. existing rights that give it the current ability to direct
the relevant activities of the investee);
– Exposure, or rights, to variable returns from its involvement with the investee; and
– The ability to use its power over the investee to affect its returns.
The Group re-assesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control.
Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed of during the year are
included in the statement of financial position and the statement of comprehensive
income from the date the Group gains control until the date the Group ceases to control
the subsidiary.
T he Group applies the acquisition method to account for business combinations. The
consideration transferred for the acquisition of a subsidiary is the fair value of the assets
transferred, the liabilities incurred to the former owners of the acquiree and the equity
interests issued by the Group. The consideration tr ansferred includes the fair value of
any asset or liability resulting from a contingent consideration arrangement. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the acquisition date. The Group
50
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2.Accounting policies - continued
2.1 Consolidation - continued
(a) Subsidiary undertakings - continued
recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition
basis, either at fair value or at the non-controlling interest’s proportionate share of the
recognised amounts of acquiree’s identifiable net assets.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date fair value of the
acquirer’s previously held equity interest in the acquiree is re-measured to fair value at
the acquisition date through profit or loss.
Goodwill is initially measured as the excess of the aggregate of the consideration
transferred and the fair value of non-controlling interest over the net identifiable assets
acquired and liabilities assumed. If this consideration is lower than the fair value of the
net assets of the subsidiary acquired, the difference is recognised in profit or loss.
Profit or loss and each component of other comprehensive income are attributed to the
equity holders of the parent of the Group and to the non-controlling interests, even if
this results in the non-controlling interests having a deficit balance. When necessary,
adjustments are made to the financial statements of subsidiaries to bring their
accounting policies in line with the Group’s accounting policies. All intra-group assets
and liabilities, equity, income, expenses and cash flows relating to transactions between
members of the Group are eliminated in full on consolidation. A list of the Group’s
subsidiaries is set out in Note 20.
(b) Associated undertakings
An associate is an entity over which the Group has significant influence. Significant
influence is the power to participate in the financial and operating policy decisions of
the investee, but is not control or joint control over those policies. The considerations
made in determining significant influence are similar to those necessary to determine
control over subsidiaries. Except for investment-linked insurance funds, interests in
associated undertakings are accounted for by the equity method of accounting and are
initially recognised at cost and the carrying amount is increased or decreased to
recognise the investor’s share of profit or loss of the investee after the date of
acquisition.
The Group’s investment in associates includes goodwill (net of any accumulated
impairment loss) identified on acquisition. Equity accounting involves recognising in
the profit or loss the share of the associated undertaking’s post-acquisition profits or
losses. The interest in the associated undertaking is carried in the statement of financial
position at an amount that reflects the share of the net assets of the associated
undertaking. When the Group’s share of losses in an associate equals or exceeds its
interest in the associate, including any other unsecured receivables, the Group does not
51
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.1 Consolidation - continued
(b) Associated undertakings - continued
recognise further losses, unless it has incurred obligations or made payments on behalf
of the associate.
Intra-group gains on transactions between the Group and its associates are eliminated to
the extent of the Group’s interest in the associates. Intra-group losses are also
eliminated unless the transaction provides evidence of an impairment of the asset
transferred. Accounting policies for associated undertakings are changed where
necessary to ensure consistency with the policies adopted by the Group. A list of the
Group’s associated undertakings is set out in Note 21.
Interests in associated undertakings that are allocated to the insurance fund are
designated as financial assets at fair value through profit or loss. They are accounted
for in accordance with the recognition and measurement principles described in Note
2.9.
2.2 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting
provided to the chief operating decision-maker. The chief operating decision-maker,
responsible for allocating resources and assessing performance of the operating
segments, has been identified as the executive management which implements the
strategic decisions taken by the Board. In identifying the Group’s business segments,
the chief operating decision-maker has considered the different categories of insurance
classes of business.
2.3 Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured
using the currency of the primary economic environment in which the entity operates
(the ‘functional currency’). The euro is the Group’s and Company’s functional and
presentation currency.
Transactions and balances
Transactions in foreign currencies have been converted into the functional currency at
the rates of exchange ruling on the date of the transaction or valuation where items are
re-measured. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the profit or loss account.
All other foreign exchange gains and losses are presented in the profit or loss account
within ‘Other investment revenue’.
52
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2.Accounting policies - continued
2.3 Foreign currency translation - continued
Transactions and balances - continued
Translation differences on non-monetary items, mainly arising on equities held at fair
value through profit or loss, are reported as part of 'Other investment revenue'.
2.4 Intangible assets
(a)Computer software
Acquired computer software licences are measured at cost less any accumulated
amortization and any accumulated impairment losses. Acquired computer software
licenses are capitalised on the basis of the costs incurred to acquire and bring to use the
specific software. These costs are amortised using the straight-line method over their
useful lives, not exceeding a period of ten years. All costs associated with maintaining
computer software programmes are recognised as an expense as incurred.
(b) Deferred policy acquisition costs
Incremental costs that are incurred in acquiring new investment contracts without DPF
are capitalised as deferred acquisition costs (DAC).
The DAC is subsequently amortised over the life of the contracts as follows:
– For long-term investment contracts with a fixed maturity date, DAC is amortised
over the life of the contract.
– For long term investment contracts with no fixed date of maturity, DAC is
amortised over the estimated life of the contract. This basis is reviewed periodically
with reference to the historical experience of surrenders for these contracts.
2.5 Property, plant and equipmen t
All property, plant and equipment is initially recorded at historical cost. Freehold land
and buildings are subsequently shown at revalued amount being its fair value at the end
of the revaluation less accumulated depreciation for buildings and any accumulated
impairment losses. Fair value is based on periodic valuations by qualified valuers to
ensure that the carrying amount of property does not differ materially from that which
would be determined using fair values at the end of the reporting period. Any
accumulated depreciation at the date of revaluation is eliminated against the gross
carrying amount of the asset, and the net amount is restated to the revalued amount of
the asset. All other property, plant and equipment is stated at historical cost less
depreciation and impairment losses. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
53
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.5 Property, plant and equipment - continued
Subsequent costs are included in the asset’s carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can be measured reliably.
The carrying amount of the replaced part is derecognised. All other repairs and
maintenance costs are charged to the profit or loss account during the financial period
in which they are incurred.
Increases in the carrying amount arising on revaluation of land and buildings are
credited to other comprehensive income as other reserves in shareholders’ equity.
Decreases that offset previous increases of the same asset are charged against other
comprehensive income as other reserves directly in equity; all other decreases are
charged to the profit or loss account. Each year the difference between depreciation
based on the revalued carrying amount of the asset charged to the profit or loss account
and depreciation based on the asset’s original cost is transferred from ‘other reserves’ to
‘retained earnings’.
Freehold land is not depreciated as it is deemed to have an indefinite life. Depreciation
on other assets is calculated using the straight-line method to allocate their cost or
revalued amounts to their residual values over their estimated useful lives as follows:

| Buildings | 100 years
| Leasehold improvements | 10 - 40 years
| Motor vehicles | 5 years
| Furniture, fittings and equipment | 3 - 10 years

The assets’ residual values and useful lives are reviewed at the end of each reporting
period and adjusted if appropriate.
An asset’s carrying amount is written down immediately to its recoverable amount if
the asset’s carrying amount is greater than its estimated recoverable amount (accounting
policy 2.16).
Gains and losses on disposals are determined by comparing proceeds with carrying
amounts and are included in the profit or loss account. When revalued assets are sold,
the amounts included in other reserves relating to the assets are transferred to retained
earnings.
54
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.6 Investment property
Freehold and leasehold properties treated as investment property principally comprise
office and other commercial buildings that are held for long term rental yields and that
are not occupied by the Group or Company respectively. Investment property is initially
measured at cost and subsequently carried at fair value. Fair value is based on active
market prices, adjusted, if necessary for any difference in the nature, location or
condition of the specific asset. If this information is not available, the Group uses
alternative valuation methods such as discounted cash flow projections or recent prices
in less active markets. These valuations are reviewed annually by qualified valuers.
Investment property that is being redeveloped for continuing use as investment
property, or for which the market has become less active, continues to be measured at
fair value. Changes in fair values are reported in the profit or loss account.
If an investment property becomes owner-occupied, it is reclassified as property, plant
and equipment, and its fair value at the date of reclassification becomes its cost for
subsequent accounting purposes.
2.7 Investments in subsidiary undertakings
In the Company’s financial statements, investments in subsidiary undertakings are
accounted for by the cost method of accounting less impairment.
Provisions are recorded where, in the opinion of the directors, at the end of a reporting
period, there is an impairment in value. Where there has been an impairment in the
value of an investment, it is recognised as an expense in the period in which the
impairment is identified or has occurred. If in a subsequent period, the amount of the
impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised, the previously recognised impairment
loss is reversed by adjusting the allowance account. The amount of the reversal is
recognised in the profit or loss account.
The dividend income from such investments is included in the profit or loss account in
the accounting year in which the Company’s rights to receive payment of any dividend
is established.
On disposal of an investment, the difference between the net disposal proceeds and the
carrying amount is charged or credited to the profit or loss account and included within
'Other investment revenue'.
55
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.8 Investments in associated undertakings
In the Company’s financial statements, investments in associated undertakings are
accounted using the equity method. They are initially recognised at cost which includes
transaction costs. Subsequent to initial recognition the carrying amount is increased or
decreased to recognise the investor’s share of profit or loss. Distributions received from
an investee reduce the carrying amount of the investment. The changes in the investee’s
proportionate interest arising from changes in the investee’s other comprehensive
income, such as those arising from revaluation of property, plant and equipment and
from exchange translation differences are recognised in the other comprehensive
income.
2.9 Financial instruments
(a) Summary of measurement categories
The Group classifies its financial assets and financial liabilities into the following
categories:

|  | Classification | Reason
| Cash and cash equivalents | Amortised Cost | SPPI, hold to collect business model
| Other investments | FVTPL | Trading or portfolio managed at FV
| Other investments | FVOCI | SPPI, hold to collect and sell business model
| Other investments | Amortised Cost | SPPI, hold to collect business model
| Trade and other receivables | Amortised Cost | SPPI, hold to collect business model
| Other payables | Amortised Cost | Not managed at FV
| Investment contract liabilities | FVTPL | Managed at FV

The Group does not apply hedge accounting.
(b)Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Group becomes a party
to the contractual provisions of the instrument. Regular way purchases and sales of
financial assets are recognised on the trade date (that is, the date on which the Group
commits to purchase or sell the asset).
At initial recognition, the Group measures a financial asset or financial liability at its
fair value, plus or minus, in the case of a financial asset or financial liability not at
FVTPL, transaction costs that are incremental and directly attributable to the acquisition
or issue of the financial asset or financial liability, such as fees and commissions.
Transaction costs of financial assets and financial liabilities carried at FVTPL are
expensed in profit or loss. Immediately after initial recognition, an ECL allowance is
recognised for financial assets measured at AC and investments in debt instruments
measured at FVOCI.
56
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.9 Financial instruments - continued
(b)Initial recognition and measurement - continued
When the fair value of financial assets and liabilities differs from the transaction price
on initial recognition, the entity recognises the difference as follows:
a. When the fair value is evidenced by a quoted price in an active market for an
identical asset or liability (that is, a Level 1 input) or based on a valuation technique
that uses only data from observable markets, the difference is recognised as a gain
or loss.
b. In all other cases, the difference is deferred and the timing of recognition of
deferred day one profit or loss is determined individually. It is either amortised over
the life of the instrument, deferred until the instrument’s fair value can be
determined using market observable inputs, or realised through settlement.
(c) Amortised cost and effective interest rate
Amortised cost (AC) is the amount at which the financial asset or financial liability is
measured at initial recognition minus the principal repayments, plus or minus the
cumulative amortisation using the effective interest method for any difference between
the initial amount and the maturity amount and, for financial assets, adjusted for any
loss allowance.
The effective interest rate (EIR) is the rate that exactly discounts estimated future cash
payments or receipts through the expected life of the financial asset or financial liability
to the gross carrying amount of a financial asset (that is, its AC before any impairment
allowance) or to the AC of a financial liability. The calculation does not consider the
ECL and includes transaction costs, premiums or discounts and fees and points paid or
received that are integral to the EIR.
When the Group revises the estimates of future cash flows, the carrying amount of the
respective financial asset or financial liability is adjusted to reflect the new estimate
discounted using the original EIR. Any changes are recognised in profit or loss.
Interest revenue is calculated by applying the EIR to the gross carrying amount of
financial assets recognised at AC or FVOCI.
57
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.9 Financial instruments - continued
2.9.1 Financial assets
(a) Business model
The business model reflects how the Group manages assets in order to generate cash
flows. That is, it reflects whether the Group’s objective is solely to collect the
contractual cash flows from assets or to collect both the contractual cash flows and cash
flows arising from the sale of assets. If neither of these is applicable (for example,
financial assets are held for trading purposes), the financial assets are classified as part
of the other business model and measured at FVTPL.
Factors considered by the Group in determining the business model for a group of
assets include past experience on how the cash flows for these assets were collected,
how the asset’s performance is evaluated and reported to key management personnel,
how risks are assessed and managed, and how managers are compensated. For example,
the business model for the investments underlying investment contracts with DPF is to
hold to collect and sell contractual cash flows. The proceeds from the contractual cash
flows of the financial assets are used to settle insurance contract liabilities as they
become due.
(b) Solely payments of principal and interest ('SPPI')
Where the business model is to hold assets to collect contractual cash flows or to collect
contractual cash flows and sell, the Group assesses whether the financial instruments’
cash flows represent SPPI (the SPPI test). In making this assessment, the Group
considers whether the contractual cash flows are consistent with a basic lending
arrangement (that is, interest includes only consideration or the time value of money,
credit risk, other basic lending risks and a profit margin that is consistent with a basic
lending arrangement). Where the contractual terms introduce exposure to risk or
volatility that are inconsistent with a basic lending arrangement, the related financial
asset is classified and measured at FVTPL.
(c) Debt instruments
Debt instruments are those instruments that meet the definition of a financial liability
from the issuer’s perspective, such as government and corporate bonds.
The classification and subsequent measurement of debt instruments depend on:
– the Group’s business model for managing the asset; and
– the cash flow characteristics of the asset (represented by SPPI).
58
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - c ontinued
2.9 Financial instruments - continued
2.9.1 Financial assets - continued
(c) Debt instruments - continued
Based on these factors, the Group classifies its debt instruments into one of the following
three measurement categories:
a. AC: Assets that are held for collection of contractual cash flows where those cash
flows represent SPPI, and that are not designated at FVTPL, are measured at AC. The
carrying amount of these assets is adjusted by any ECL allowance recognised and
measured, as described further below. Interest revenue from these financial assets is
included in the profit or loss under interest revenue calculated using the effective
interest method.
b. FVOCI: Financial assets that are held for collection of contractual cash flows and for
selling the assets, where the assets’ cash flows represent SPPI, and that are not
designated at FVTPL, are measured at FVOCI. Movements in the carrying amount are
taken through OCI, except for the recognition of impairment gains or losses, interest
revenue and foreign exchange gains and losses on the instrument’s AC, which are
recognised in profit or loss. When the financial asset is derecognised, the cumulative
gain or loss previously recognised in OCI is reclassified from equity to profit or loss
and recognised in other investment revenue. Interest revenue from these financial
assets is included in interest revenue calculated using the effective interest method.
c. FVTPL: Assets that do not meet the criteria for AC or FVOCI are measured at
FVTPL. Also, some assets are voluntarily measured at FVTPL, because this
significantly reduces an accounting mismatch. A gain or loss on a debt investment
that is subsequently measured at FVTPL is recognised and presented in the
consolidated statement of profit or loss within other investment revenue in the period
in which it arises.
The Group reclassifies debt instruments only when its business model for managing
those assets changes. The reclassification takes place from the start of the first
reporting period following the change. Such changes are expected to be very
infrequent, and none occurred during the period.
(d) Equity instruments
Equity instruments are instruments that meet the definition of equity from the issuer’s
perspective (that is, instruments that do not contain a contractual obligation to pay and
that evidence a residual interest in the issuer’s net assets). Examples of equity
instruments include basic ordinary shares.
The Group subsequently measures all equity investments at FVTPL. Gains and losses on
equity investments at FVTPL are included in the line ‘Other investment revenue’ in the
consolidated statement of profit or loss.
59
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.9 Financial instruments - continued
2.9.1 Financial assets - continued
(e) Cash and cash equivalents
Cash and cash equivalents include cash balances and financial instruments with original
maturities of three months or less from the date of acquisition that are subject to an
insignificant risk of changes in their fair value, and are used by the Group in the
management of its short-term commitments. Cash and cash equivalents are carried in the
statement of financial position at AC net of ECL.
(f) Fair Value Measurement
For financial instruments traded in active markets, the determination of fair values of
financial assets and financial liabilities is based on quoted market prices or dealer price
quotations. This includes listed equity securities and quoted debt instruments on major
exchanges. The quoted market price used for financial assets held by the Group is the
current bid price or closing price as appropriate. A financial instrument is regarded as
quoted in an active market if quoted prices are readily and regularly available from an
exchange, dealer, broker, industry group, pricing service or regulatory agency, and those
prices represent actual and regularly occurring market transactions on an arm’s length
basis. If the market for a financial asset is not active, the Group establishes fair value by
using valuation techniques. These include the use of recent arm’s length transactions,
reference to other instruments that are substantially the same or valued by reference to
the net assets of the underlying investment.
(g) Impairment
(i) Debt instruments and cash and cash equivalents
The Group assesses the ECL associated with its debt instruments measured at AC and
debt instrument assets carried at FVOCI. The Group recognises a loss allowance for
such losses at each reporting date. The measurement of the ECL reflects:
a. an unbiased evaluation of a range of possible outcomes and their probabilities of
occurrence;
b. discounting for the time value of money; and
c. reasonable and supportable information that is available without undue cost or effort
at the reporting date about past events, current conditions and forecasts of future
economic conditions
60
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.9 Financial instruments - continued
2.9.1 Financial assets - continued
(g) Impairment - continued
(i) Debt instruments and cash and cash equivalents- continued
However, IFRS 9 emphasises that estimating ECL may not necessarily need to be a
complex process and that an entity need not identify every possible scenario. In some
cases, relatively simple modelling may be sufficient without the need for many detailed
simulations or scenarios.
The Group calculates the ECL at an instrument level, using three main components:
– a probability of default (‘PD’),
– a loss given default (‘LGD’),
– and the exposure at default (‘EAD’).
At initial recognition, an allowance is required for ECL resulting from default events
that are possible within the next 12 months, or less, where the remaining life is less than
12 months (‘12-month ECL’).
In the event of a ‘significant increase in credit risk’ (SICR), an allowance is required for
ECL resulting from all possible default events over the expected life of the financial
instrument (‘Lifetime ECL’). In the case of a non-maturity deposit, the Group assumes a
lifetime of 1 month.
Financial assets where 12-month ECL is recognised are considered to be ‘stage 1’;
financial assets which are considered to have experienced a SICR are classified as ‘stage
2’; and financial assets for which there is objective evidence of impairment, and which
are so considered to be in default or otherwise credit impaired, are classified as ‘stage 3’.
The ECL allowance and any changes to it are recognised by recognising impairment
gains and losses in profit or loss.
(ii) Trade receivables
For trade receivables, the Company applies the simplified approach required by IFRS 9,
which requires expected lifetime losses to be recognised from initial recognition of the
receivables. An impairment analysis is performed at each reporting date using a
provision matrix to measure expected credit losses. The provision rates are based on
days past due for groupings of various customer segments with similar loss patterns. The
Company considers trade receivables in default when contractual payments are past their
credit terms.
61
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.9 Financial instruments - continued
2.9.1 Financial assets - continued
(g) Impairment - continued
(ii) Trade receivables - continued
Trade receivables are written off when there is no reasonable expectation of recovery.
Indicators that there is no reasonable expectation of recovery include, among others, the
probability of insolvency or significant financial difficulties of the debtor.
(h) Derecognition
Financial assets, or a portion thereof, are derecognised when the contractual rights to
receive the cash flows from the assets have expired, or when they have been transferred
and either (i) the Group transfers substantially all of the risks and rewards of ownership;
or (ii) the Group neither transfers nor retains substantially all of the risks and rewards of
ownership and the Group has not retained control.
The Group enters into transactions where it retains the contractual rights to receive cash
flows from assets but assumes a contractual obligation to pay those cash flows to other
entities and transfers substantially all of the risks and rewards. These transactions are
accounted for as pass-through transfers that result in derecognition if the Group:
a. has no obligation to make payments unless it collects equivalent amounts from the
assets;
b. is prohibited from selling or pledging the assets; and
c. has an obligation to remit any cash that it collects from the assets without material
delay
(i) Modification
If cash flows are modified when the debtor is in financial difficulties, then the objective
of the modification is usually to maximise recovery of the original contractual cash
flows rather than to originate a new asset with substantially different terms. If the Group
plans to modify a financial asset in a way that would result in forgiveness of cash flows,
then it first considers whether a portion of the asset should be written off before the
modification takes place.
2.9.2 Financial liabilities
(a) Classification and subsequent measurement
Financial liabilities are classified and subsequently measured at AC, except for
derivatives and investment contracts without DPF, which are measured at FVTPL.
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MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2 Accounting policies - continued
2.9 Financial instruments - continued
2.9.2 Financial liabilities - continued
(a) Classification and subsequent measurement - continued
Investment contracts without DPF are financial liabilities whose fair value is dependent
on the fair value of underlying financial assets and are designated at inception at
FVTPL. The Group designates these investment contracts to be measured at FVTPL,
because it eliminates or significantly reduces a measurement or recognition
inconsistency (that is, an accounting mismatch) that would otherwise arise from
measuring assets or liabilities or recognising the gains and losses on them on different
bases.
The Group’s main valuation techniques incorporate all factors that market participants
would consider and make maximum use of observable market data. The fair value of
financial liabilities for investment contracts without DPF is determined using the
current unit values in which the contractual benefits are denominated. These unit values
reflect the fair values of the financial assets contained within the Group’s unitised
investment funds linked to the financial liability. The fair value of the financial
liabilities is obtained by multiplying the number of units attributed to each contract
holder at the end of the reporting period by the unit value for the same date.
When the investment contract has a surrender option, the fair value of the financial
liability is never less than the amount payable on surrender.
Changes in the fair value of financial liabilities measured at FVTPL are presented in the
statement of profit or loss.
(b) Derecognition
Financial liabilities are derecognised when they are extinguished (that is, when the
obligation specified in the contract is discharged, is cancelled or expires). The Group
also derecognises a financial liability when its terms are modified and the cash flows of
the modified liability are substantially different, in which case a new financial liability
based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount
extinguished and the consideration paid (including any non-cash assets transferred or
liabilities assumed) is recognised in profit or loss.
(c) Modification
If a financial liability measured at amortised cost is modified but not substantially, then
it is not derecognised.
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MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2 Accounting policies - continued
2.9 Financial instruments - continued
2.9.2 Financial liabilities - continued
(d) Derivatives
Derivatives are initially recognised at fair value on the date on which the derivative
contract is entered into and are subsequently remeasured at fair value. All derivatives
are carried as assets when fair value is positive and as liabilities when fair value is
negative. Fair values are obtained from quoted market prices in active markets, and
other valuation techniques, as appropriate. Subsequent changes in the fair value of any
derivative instruments are recognised immediately in profit or loss.
2.10 Insurance and investment contracts issued and reinsurance contracts held
The Group issues contracts that transfer insurance risk or financial risk or both.
(a)Definition and classification
The following table provides an overview of the Group’s assessment of its products
and whether these fall in scope of IFRS 17:
64
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2.Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held -
continued
(a)Definition and classification - continued

| Type of contract | Contracts issued | Within scope of IFRS 17 | Measurement model | Description of benefit
| Short-term insurance contracts | Insurance contracts - Non-Life and Group Life contracts | Yes | PAA | Pure insurance contracts carrying significant insurance risk where the obligation of the Group towards the insured is the payment for loss incurred if the insured event occurs whilst the policy is in force.
| Long-term insurance contracts - Life risk | Insurance contracts - Term assurance including term riders | Yes | General Measurement Model ('GMM') | Pure insurance contracts carrying significant insurance risk where the obligation of the Group towards the insured is the payment of a death benefit, if the death occurs whilst the policy is in force.
| Long-term insurance contracts - Life risk | Unit-linked – Maximum Investment Plan | Yes | GMM | A unit-linked contract with significant insurance risk is one that incorporates a material sum assured within the contract (i.e. the sum assured/minimum death benefit provided, exceeds the investment value of the product). This group of contracts was substantially modified resulting to derecognition during 2025.

| Direct participating contracts | With-profits (Investment contracts with DPF) | Yes | Variable Fee Approach ('VFA') | Investment contracts with DPF where the obligation of the Group towards the insured also includes an annual discretionary investment return (declared bonus rate).
| Direct participating contracts | Hybrids (Investment contracts with DPF) | Yes | VFA | These are mainly unit-linked products including with-profits components (investment contract with DPF).
| Investment contracts | Unit-linked - others (Investment contracts without DPF) | No | FVTPL | Investment contracts which pays the policyholder an additional 1% of the fund value at the time of death, this component is deemed to be immaterial to the overall value of the fund and therefore, no significant insurance risk is deemed to arise from it. Therefore, these contracts are valued in line with IFRS 9 'Financial Instruments'.

65
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2.Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(a)Definition and classification - continued
Insurance contracts are contracts under which the Group accepts significant insurance
risk from a policyholder by agreeing to compensate the policyholder if a specified
uncertain future event adversely affects the policyholder. In making this assessment, all
substantive rights and obligations, including those arising from law or regulation, are
considered on a contract by contract basis. Judgement is used to assess whether a
contract transfers insurance risk and whether the accepted insurance risk is significant.
Generally, the Group defines as significant insurance risk the possibility of having to
pay benefits on the occurrence of an insured event that at least 5% more than the
benefits payable (on a present value basis) if the insured event did not occur. The
Group accounts for these contracts under IFRS 17.
The Group also issues term riders which represent an add-on to a basic policy that
provides additional benefits to policyholders (at additional cost). They can be
purchased by a policyholder concurrently to a basic policy or at a subsequent date, i.e.
a date after the inception of the basic policy. The addition of a term rider triggers
medical underwriting at the point in time the rider is added, giving the Group the
ability to reprice the policy at that point in time. The Group has concluded that term
riders are to be separated from the host contract and will form part of the term
portfolio.
Contracts that have a legal form of insurance but do not transfer significant insurance
risk and expose the Group to financial risk are classified as investment contracts, and
they follow financial instruments accounting under IFRS 9, unless they have DPF as
described below, in which case they are accounted for as insurance contracts.
A number of investment contracts contain a DPF. This feature entitles the holder to
receive, as a supplement to guaranteed benefits (i.e. amounts not subject to the Group's
discretion), additional benefits or bonuses:
– that are likely to be a significant portion of the total contractual benefits;
– whose amount or timing is contractually at the discretion of the Group; and
– that are based on realised and/or unrealised investment returns on specified pools
of underlying assets held by the Group.
The Group also issues a ‘hybrid’ product which is a unit-linked product that gives
policyholders the possibility to initially allocate, and subsequently switch, a portion of
the premium to a ‘with-profits’ DPF holding as well as a unit-linked holding. This
product was deemed to fall within scope of IFRS 17 when the policyholder allocates a
percentage holding in the with-profits fund as at inception or transition date.
Furthermore, management concluded that the unit-linked component of the product
does not constitute a distinct investment component, given that both elements of the
‘hybrid’ product cannot be measured and presented separately and are interdependent
on each other.
66
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2.Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(a)Definition and classification - continued
Since this product is primarily a unit-linked product with the option to hold a
percentage of the holding in the with-profits fund, management has determined that for
such a contract to be in scope of IFRS 17, it needs to hold a 5% level of significant
discretionary benefit.
Local statutory regulations and the terms and conditions of both investment contracts
with DPF and hybrids set out the basis for the determination of the amounts on which
the additional discretionary benefits are based (the DPF eligible surplus), and within
which the Group may exercise its discretion as to the quantum and timing of their
payment to contract holders, also considering the advice of the Approved Actuary. The
Group accounts for these contracts under IFRS 17, as it also issues insurance contracts.
The Group assesses investment contracts that qualify as having direct participation
features as a result of the nature of their design (i.e. they are primarily investment
related contracts where the investment risk is substantially borne by the policyholder) to
ascertain whether or not they meet the VFA eligibility criteria.
IFRS 17 requires these criteria to be assessed at the individual contract level. The
Group assessed the criteria at the product level. The assessment is carried out based on
the Group's expectations at inception, and is not reassessed subsequently, unless the
product is modified.
The with-profits policies are ring fenced, meaning, a barrier clearly segregates the
policyholder assets participating in the fund from the shareholders’ ones. Therefore, the
pool of assets is clearly identifiable. The ‘underlying items’ in this case would be the
with-profits assets.
Investment contracts with direct participation features are viewed as creating an
obligation to pay policyholders an amount that is equal to the fair value of the
underlying items, less a variable fee for service. The variable fee comprises the amount
of the Group’s share of the fair value of the underlying items less the fulfillment cash
flows ('FCF') that do not vary based on the returns on underlying items. Therefore, on
an average probability-weighted basis, the Group considers that the amount it expects to
pay to policyholders comprises a substantial portion of the fair value returns on
underlying items.
The variability in cash flows is assessed over the duration of the insurance contracts and
on the basis of the average of the probability-weighted present value. The duration of
the contract takes into account all the cash flows in the contract boundary. The major
component of the liability (the present value of the future net cash outflows) is made up
of claims which vary substantially with the underlying items.
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MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2.Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(a)Definition and classification - continued
In the normal course of business, the Group uses reinsurance to mitigate its risk
exposures. A reinsurance contract transfers significant risk if it transfers substantially
all of the insurance risk resulting from the insured portion of the underlying insurance
contracts, even if it does not expose the reinsurer to the possibility of a significant loss.
For short-term insurance contracts, the Group uses the PAA simplified method to
measure groups of contracts. All short-term insurance contracts originated by the
Group, are without direct participation features.
All references to insurance contracts in these consolidated financial statements apply to
insurance contracts issued or acquired, reinsurance contracts held and investment
contracts with DPF, unless specifically stated otherwise.
(b) Unit of account
The Group manages insurance contracts issued by product type, where each product
type includes contracts which are subject to similar risks and are managed together. The
Group has determined that contracts have similar risk and are managed together if they
are priced together, have the same underwriting process, have common reporting, and
claims and risks underlying the contracts are managed together. All insurance contracts
of the same product type represent a portfolio. Each portfolio is further disaggregated
into groups of contracts that are issued within a calendar year (annual cohorts) and are
at initial recognition:
– contracts that are onerous; or
– all remaining contracts.
In variation to the above, as further described below, in contrast with all other contracts
in scope of IFRS 17, investment contracts with DPF are not grouped by annual cohort.
As per Article 2 of the Commission Regulation (EU) 2021/2036 and 2023/1803, a
Group may choose not to apply the annual cohorting requirement to groups of
investment contracts with discretionary participation features and with cash flows that
affect or are affected by cash flows to policyholders of other contracts.
The Group’s with-profits fund is a pool of policies sharing in the same pool of
underlying items. Therefore, the risk that a particular policy becomes onerous (i.e. the
possibility of the with-profits fund assets being lower than the present value of its future
liabilities) is shared between the policyholders within this pool. In such instances,
policies, which do not exhibit such onerosity, will make good for those policies which
are onerous.
68
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2.Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(b) Unit of account - continued
Given that the Group’s with-profits fund has all mutualisation features described above,
the Group has chosen to apply the option to avoid allocating policies to annual cohorts
as these are groups of investment contracts with DPF and with cash flows that affect or
are affected by cash flows to policyholders of other contracts. All with-profits and
hybrid policies will therefore be allocated to a single cohort.
Portfolios of reinsurance contracts held are assessed for aggregation separately from
portfolios of insurance contracts issued. Separate portfolios for reinsurance contracts
held were therefore established and the Group has a number of reinsurance portfolios.
In groups of reinsurance contracts held, the amount an entity pays generally exceeds the
expected present value of the cash flows generated by that reinsurance contract plus the
risk adjustment for non-financial risk and thus the Group is usually in a net cost
position. The Group has determined that the reinsurance contracts held will be grouped
by calendar or underwriting year (annual cohorts) depending whether they are loss
occurring or risk attaching under the category ‘all remaining contracts’ which includes
reinsurance contracts held with an initial net cost but with a possibility of a future net
gain.
Transition approaches that were applied by the Group on adoption of IFRS 17 with
respect to contracts aggregation requirements are included in Note 6.
Before the Group accounts for an insurance contract based on the guidance in IFRS 17,
it analyses whether the contract contains components that should be separated. IFRS 17
distinguishes three categories of components that have to be accounted for separately:
- cash flows relating to embedded derivatives that are required to be separated;
- cash flows relating to distinct investment components; and
- promises to transfer distinct goods or distinct services other than insurance contract
services.
The Group applies IFRS 17 to all remaining components of the contract. The Group
does not have any contracts that require further separation (except for term riders – refer
to note 2.10(a). The Group also does not have any contracts that require combination.
69
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(c) Recognition, modification and derecognition
Recognition
Groups of insurance contracts issued are initially recognised from the earliest of the
following:
- the beginning of the coverage period;
- the date when the first payment from the policyholder is due or actually received, if
there is no due date; and
- when the Group determines that a group of contracts becomes onerous.
Investment contracts with DPF are initially recognised at the date when the Group
becomes a party to the contract.
Reinsurance contracts held are recognised from the later of the following:
- the beginning of the coverage period of the group; and
- the initial recognition of any underlying insurance contract;
Unless the Group entered into the reinsurance contract held at or before the date when
an onerous group of underlying contracts is recognised prior to the beginning of the
coverage period of the group of reinsurance contracts held, in which case the
reinsurance contract held is recognised at the same time as the group of underlying
insurance contracts is recognised.
Only contracts that individually meet the recognition criteria by the end of the reporting
period are included in the groups. When contracts meet the recognition criteria in the
groups after the reporting date, they are added to the groups in the reporting period in
which they meet the recognition criteria, subject to the annual cohorts restriction.
Composition of the groups is not reassessed in subsequent periods.
Modification and derecognition
An insurance contract is derecognised when it is extinguished (that is, when the
obligation specified in the insurance contract expires or is discharged or cancelled), or
when the contractual terms are modified in a way that would have changed the
accounting for the contract significantly had the new terms always existed, in which
case a new insurance contract is recognised.
If a contract modification is not significant, the changes in cash flows caused by the
modification are treated as changes in estimates of FCF.
70
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(c) Recognition, modification and derecognition - continued
Modification and derecognition - continued
When an insurance contract is derecognised from within a group of insurance contracts, the
Group:
– adjusts the FCF to eliminate the present value of future cash flows and risk adjustment
for non-financial risk relating to the rights and obligations removed from the group;
– adjusts the CSM; and
– adjusts the number of coverage units for the expected remaining insurance contract
services, to reflect the number of coverage units removed.
On the other hand, when an insurance contract accounted for under the PAA is
derecognised, adjustments to the future cash flows to remove related rights and
obligations to account for the effect of the derecognition result in the following amounts
being charged immediately to profit or loss:
a. if the contract is extinguished, any net difference between the derecognised part of
the Liability for Remaining Coverage (LRC) of the original contract and any other
cash flows arising from extinguishment.
b. if the contract is transferred to the third party, any net difference between the
derecognised part of the LRC of the original contract and the premium charged by
the third party; or
c. if the original contract is modified resulting in its derecognition, any net difference
between the derecognised part of the LRC and the hypothetical premium that the
entity would have charged if it had entered into a contract with equivalent terms as
the new contract at the date of the contract modification, less any additional
premium charged for the modification.
(d)Measurement
Fulfilment cash flows
Fulfilment cash flows (‘FCF’) are the current estimates of the future cash flows within
the contract boundary of a group of contracts that the Group expects to collect from
premiums and pay out for claims, benefits and expenses, adjusted to reflect the timing
and the uncertainty of those amounts.
Estimates of future cash flows:
a. are based on a probability-weighted average of all possible outcomes;
b. are reflective of the Group’s perspective, provided estimates of any relevant market
variables are consistent with observable market prices for those variables; and
c. are reflective of conditions existing at measurement date.
71
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(d)Measurement - continued
Fulfilment cash flows - continued
An explicit risk adjustment for non-financial risk is estimated separately from the other
estimates for Assets for Remaining Coverage ('ARC') and Liability for Remaining
Coverage ('LRC'). For contracts measured under the PAA, unless the contracts are
onerous, the explicit risk adjustment for non-financial risk is only estimated for the
measurement of the Liability for Incurred Claims ('LIC').
The estimates of future cash flows are also adjusted using current discount rates to
reflect the time value of money and financial risks relating to these cash flows. The
discount rates reflect the characteristics of the cash flows arising from the groups of
insurance contracts, including timing, currency and liquidity of cash flows. The
determination of the discount rate that reflects the characteristics of the cash flows and
liquidity characteristics of the insurance contracts requires judgement and estimation.
Risk of non-performance is not included in the measurement of groups of insurance
contracts issued. In the measurement of reinsurance contracts held, the probability-
weighted estimates of the present value of future cash flows include the potential credit
losses and other disputes of the reinsurer to reflect the non-performance risk of the
reinsurer.
The Group estimates certain FCF at the portfolio level or higher and then allocates such
estimates to groups of contracts.
The Group uses consistent assumptions to measure the estimates of the present value of
future cash flows for the group of reinsurance contracts held and such estimates for the
groups of underlying insurance contracts.
Contract boundary
The Group uses the concept of contract boundary to determine what cash flows should
be considered in the measurement of groups of insurance contracts.
Cash flows are within the boundary of an insurance contract if they arise from
substantive rights and obligations that exist during the reporting period in which the
Group can compel the policyholder to pay the premiums or in which the Group has a
substantive obligation to provide the policyholder with insurance contract services.
72
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(d)Measurement - continued
Contract boundary - continued
A substantive obligation lasts until:
a) the Group has the practical ability to reassess the risks of a particular policyholder,
and hence, can set a price to fully reflect those risks; or
b) both of the following criteria are satisfied:
i. the Group has a practical ability to reassess the risks of the portfolio of insurance
contracts, as a result of which it can set a price to fully reflect those risks; and
ii. the pricing of premiums up to the date when the risks are reassessed does not take
into account the risks that relate to periods after the reassessment date.
In assessing the practical ability to reprice, risks transferred from the policyholder to the
Group, such as insurance risk and financial risk, are considered; other risks, such as
lapse or surrender and expense risk, are not included.
For contracts issued under the PAA, riders, representing add-on provisions to a basic
insurance policy that provide additional benefits to the policyholder at additional cost,
that are issued together with the main insurance contracts, form part of a single
insurance contract with all the cash flows within its boundary.
Cash flows outside the insurance contracts boundary relate to future insurance contracts
and are recognised when those contracts meet the recognition criteria.
Cash flows are within the boundaries of investment contracts with DPF if they result
from a substantive obligation of the Group to deliver cash at a present or future date.
For groups of reinsurance contracts held, cash flows are within the contract boundary if
they arise from substantive rights and obligations of the Group that exist during the
reporting period in which the Group is compelled to pay amounts to the reinsurer or in
which the Group has a substantive right to receive insurance contract services from the
reinsurer.
T he Group's quota share, surplus and facultative reinsurance contracts have an annual
term and cover underlying contracts issued within the term on a risk-attaching basis.
Meaning that they cover policies ceded for the entire duration of the contract, even if
this duration exceeds that of the reinsurance contract itself.
73
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(d)Measurement - continued
Contract boundary - continued
The Group treats such reinsurance contracts as a series of annual contracts that cover
underlying business issued within a year. Estimates of future cash flows arising from all
underlying contracts issued and expected to be issued within the reinsurance contracts’
one-year boundary are included in the measurement of the reinsurance contracts.
The excess of loss contracts held provide coverage for claims incurred during an
accident year. Thus, all cash flows arising from claims incurred and expected to be
incurred in the accident year are included in the measurement of the reinsurance
contracts held. Some of these contracts include mandatory reinstatement reinsurance
premiums, which are included within the respective reinsurance contracts’ boundaries.
Cash flows that are not directly attributable to a portfolio of insurance contracts are
recognised in other operating expenses as incurred.
Insurance acquisition costs
Insurance acquisition cash flows are cash flows arising from the costs of selling,
underwriting and starting a group of insurance contracts that are directly attributable to
the portfolio of insurance contracts to which the group belongs. Insurance acquisition
cash flows for the Group comprise commission paid to intermediaries for new business
and salaries of employees whose efforts are directly related to the acquisition of new
insurance business.
Insurance acquisition cash flows that are directly attributable to a group of insurance
contracts shall be allocated to that group. IFRS 17 requires that insurance acquisition
cash flows are also allocated to groups that will include insurance contracts that are
expected to arise from renewals of the insurance contracts in that group. The latter does
not apply to the Group as it does not incur acquisition costs in relation to future
renewals.
Insurance acquisition cash flows not directly attributable to a group of contracts but
directly attributable to a portfolio of contracts are allocated to groups of contracts in the
portfolio or expected to be in a portfolio.
The Group does not incur any material directly attributable acquisition cash flows, or
other inflows or outflows, before a group of insurance contracts is recognised.
Consequently, it does not recognise any ‘pre-recognition cash flows’.
74
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(d)Measurement - continued
Risk adjustment for non-financial risk
The risk adjustment for non-financial risk is applied to the present value of the
estimated future cash flows, and it reflects the compensation that the Group requires for
bearing the uncertainty about the amount and timing of the cash flows from non-
financial risk as the Group fulfils insurance contracts.
For reinsurance contracts held, the risk adjustment for non-financial risk represents the
amount of risk being transferred by the Group to the reinsurer.
Methods and assumptions used to determine the risk adjustment for non-financial risks
are discussed in Note 24.
Contracts not measured under the PAA
Initial measurement and CSM
The CSM is a component of the carrying amount of the asset or liability for a group of
insurance contracts issued representing the unearned profit that the Group will
recognise as it provides insurance contract services in the future. At initial recognition,
the CSM is an amount that results in no income or expenses arising from:
- the initial recognition of the FCF;
- cash flows arising from the contracts in the group at that date;
When the above calculation results in a net outflow, the group of insurance contracts
would be onerous. A loss arising from onerous insurance contracts is recognised
immediately in profit or loss, with no CSM recognised in the statement of financial
position and a loss component is established in the amount of loss recognised.
No onerous contracts have been identified by the Group.
For groups of reinsurance contracts held, any net gain or loss at initial recognition is
recognised as the CSM unless the net cost of purchasing reinsurance relates to past
events, in which case the Group recognises the net cost immediately in profit or loss.
For reinsurance contracts held, the CSM represents a deferred gain or loss that the
Group will recognise as a reinsurance expense as it receives insurance contract services
from the reinsurer in the future.
75
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(d)Measurement - continued
Contracts not measured under the PAA - continued
Subsequent measurement
The carrying amount at the end of each reporting period of a group of insurance contracts
issued is the sum of:
– the LRC, comprising:
– the FCF related to future service allocated to the group at that date; and
– the CSM of the group at that date; and
– the liability for incurred claims ('LIC'), comprising the FCF related to past service
allocated to the group at the reporting date.
The carrying amount at the end of each reporting period of a group of reinsurance contracts
held is the sum of:
– the remaining coverage, comprising:
– the FCF related to future service allocated to the group at that date; and
– the CSM of the group at that date; and
– the incurred claims, comprising the FCF related to past service allocated to the group at
the reporting date.
i. Changes in fulfilment cash flows
The FCF are updated by the Group for current assumptions at the end of every reporting
period, using the current estimates of the amount, timing and uncertainty of future cash
flows and of discount rates.
The way in which the changes in estimates of the FCF are treated depends on which
estimate is being updated:
– changes that relate to current or past service are recognised in profit or loss; and
– changes that relate to future service are recognised by adjusting the CSM or the loss
component within the LRC as per the policy below.
76
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(d)Measurement - continued
Contracts not measured under the PAA - continued
Subsequent measurement - continued
i. Changes in fulfilment cash flows - continued
For insurance contracts measured under the General Measurement Model (‘GMM’), the
following adjustments relate to future service and thus adjust the CSM:
a. experience adjustments – arising from premiums received in the period that relate to
future service and related cash flows;
b. changes in estimates of the present value of future cash flows in the LRC, except
those described in the following paragraph;
c. differences between any investment component expected to become payable in the
period and the actual investment component that becomes payable in the period; and
d. changes in the risk adjustment for non-financial risk that relate to future service.
Adjustments a. and b. above are measured using discount rates determined on initial
recognition (the locked in discount rates).
For insurance contracts under the GMM, the following adjustments do not adjust the
CSM:
a. changes in the FCF for the effect of the time value of money and the effect of
financial risk and changes thereof;
b. changes in the FCF relating to the LIC;
c. experience adjustments arising from premiums received in the period that do not
relate to future service and related cash flows; and
d. experience adjustments relating to insurance service expenses (excluding insurance
acquisition cash flows).
When measuring a group of investment contracts with DPF, the Group adjusts the
fulfilment cash flows for the whole of the changes in the obligation to pay policyholders
an amount equal to the fair value of the underlying items. These changes do not relate
to future services and are recognised in profit or loss. The Group then adjusts any CSM
for changes in the amount of the Group’s share of the fair value of the underlying items,
which relate to future services, as explained below.
77
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(d)Measurement - continued
Contracts not measured under the PAA - continued
Subsequent measurement - continued
i. Changes in fulfilment cash flows - continued
For contracts measured under the VFA, the following adjustments relate to future
service and thus adjust the CSM:
– changes in the amount of the Group’s share of the fair value of the underlying
items; and
– changes in the FCF that do not vary based on the returns of underlying items:
a. changes in the effect of the time value of money and financial risks including the
effect of financial guarantees;
b. experience adjustments arising from premiums received in the period that relate to
future service and related cash flows;
c. changes in estimates of the present value of future cash flows in the LRC, except
those described in the following paragraph;
d.differences between any investment component expected to become payable in the
period and the actual investment component that becomes payable in the period;
and
e. changes in the risk adjustment for non-financial risk that relate to future service.
Adjustments b. to e. are measured using the current discount rates.
For contracts under the VFA, the following adjustments do not adjust the CSM:
– changes in the obligation to pay the policyholder the amount equal to the fair value
of the underlying items;
– changes in the FCF that do not vary based on the returns of underlying items:
– changes in the FCF relating to the LIC; and
– experience adjustments arising from premiums received in the period that do not
relate to future service and related cash flows; and
– experience adjustments relating to insurance service expenses (excluding
insurance acquisition cash flows).
The Group does not have any products with complex guarantees and does not use
derivatives as economic hedges of the risks.
78
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(d)Measurement - continued
Contracts not measured under the PAA - continued
Subsequent measurement - continued
ii Changes to the contractual service margin
For insurance contracts issued, at the end of each reporting period the carrying amount
of the CSM is adjusted by the Group to reflect the effect of the following changes:
a. The effect of any new contracts added to the group.
b. For contracts measured under the GMM, interest accreted on the carrying amount of
the CSM.
c. Changes in the FCF relating to future service are recognised by adjusting the CSM.
Changes in the FCF are recognised in the CSM to the extent that the CSM is
available. When an increase in the FCF exceeds the carrying amount of the CSM,
the CSM is reduced to zero, the excess is recognised in insurance service expenses
and a loss component is recognised within the LRC. When the CSM is zero,
changes in the FCF adjust the loss component within the LRC with correspondence
to insurance service expenses. The excess of any decrease in the FCF over the loss
component reduces the loss component to zero and reinstates the CSM.
d. The effect of any currency exchange differences.
e. The amount recognised as insurance revenue for insurance contract services
provided during the period, determined after all other adjustments above.
For a group of reinsurance contracts held, the carrying amount of the CSM at the end of
each reporting period is adjusted to reflect changes in the FCF in the same manner as a
group of underlying insurance contracts issued.
iii. Interest accretion on the CSM
Under the GMM, interest is accreted on the CSM using discount rates determined at
initial recognition that are applied to nominal cash flows that do not vary based on the
returns of underlying items. The Group uses the discount curves at the middle of each
quarter during the year. MMSV will be assuming equal weighting per quarter given the
stability of new business written.
79
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(d)Measurement - continued
Contracts not measured under the PAA - continued
Subsequent measurement - continued
iv. Adjusting the CSM for changes in the FCF relating to future service
The CSM is adjusted for changes in the FCF, measured applying the discount rates as
specified in the Changes in fulfilment cash flows section above.
v. Release of the CSM to profit or loss
The amount of the CSM recognised in profit or loss for insurance contract services in
the period is determined by the allocation of the CSM remaining at the end of the
reporting period over the current and remaining expected coverage period of the group
of insurance contracts based on coverage units.
The coverage period is defined as a period during which the entity provides insurance
contract services. Insurance contract services include coverage for an insured event
(insurance coverage), the generation of an investment return for the policyholder, if
applicable (investment-return service) for the contracts under the GMM, and the
management of underlying items on behalf of the policyholder (investment-related
service) for the contracts under the VFA. The period of investment-return service or
investment-related service ends at or before the date when all amounts due to current
policyholders relating to those services have been paid. Investment-return services are
provided only when an investment component exists in insurance contracts or the
policyholder has a right to withdraw an amount, and the Group expects these amounts
to include an investment return that is achieved by the Group by performing investment
activities to generate that investment return.
For contracts issued, the Group determines the coverage period for the CSM
recognition as follows:
- for investment contracts with DPF (including hybrids), the coverage period
corresponds to the period in which investment-return services are expected to be
provided; and
- for term life risk contracts, no investment-return services are provided and, thus, the
coverage period is determined by insurance coverage;
80
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(d)Measurement - continued
Contracts not measured under the PAA - continued
Subsequent measurement - continued
v. Release of the CSM to profit or loss - continued
The total number of coverage units in a group is the quantity of service provided by the
contracts in the group over the expected coverage period. The coverage units are
determined at each reporting period-end prospectively by considering:
– the quantity of benefits provided by contracts in the group;
– the expected coverage period of contracts in the group; and
– the likelihood of insured events occurring, only to the extent that they affect the
expected coverage period of contracts in the group.
The Group determines coverage units as follows:
– for term life insurance contracts, coverage units are determined based on the
policies’ face values that are equal to the fixed death benefit amounts in force and
– for investment contracts with DPF, including with-profits and unit-linked hybrids,
coverage units are based on the fund assets and value of the fund.
The Group does not reflect the time value of money in the allocation of the CSM to
coverage units.
For reinsurance contracts held, the CSM is released to profit or loss as insurance
contract services are received from the reinsurer in the period.
Coverage units for the proportionate term life reinsurance contracts held are based on
the insurance coverage provided by the reinsurer, and they are determined by the ceded
policies’ fixed face values in force, taking into account new business projected within
the reinsurance contract boundary.
The coverage period for these contracts is determined based on the coverage period of
all underlying contracts whose cash flows are included in the reinsurance contract
boundary.
81
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2. Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(d)Measurement - continued
Contracts measured under the PAA
The Group uses the PAA for measuring contracts with a coverage period of one year or
less. In addition to the contracts with coverage of less than one year, the PAA can be
used for measurement of groups of contracts where the entity reasonably expects that
such a simplification would produce a measurement of the LRC that would not differ
materially from the one that would be produced by applying the GMM.
For insurance contracts issued, insurance acquisition cash flows allocated to a group are
deferred and recognised over the coverage period of contracts in a group.
For insurance contracts issued, on initial recognition, the Group measures the LRC at
the amount of premiums received, less any acquisition cash flows paid.
For reinsurance contracts held, on initial recognition, the Group measures the remaining
coverage at the amount of ceding premiums paid.
The carrying amount of a group of insurance contracts issued at the end of each
reporting period is the sum of:
a. the LRC; and
b. the LIC, comprising the FCF related to past service allocated to the group at the
reporting date.
The carrying amount of a group of reinsurance contracts held at the end of each
reporting period is the sum of:
a. the remaining coverage; and
b. the incurred claims, comprising the FCF related to past service allocated to the
group at the reporting date.
For insurance contracts issued, at each of the subsequent reporting dates, the LRC is:
a. increased for premiums received in the period;
b. decreased for insurance acquisition cash flows paid in the period;
c. decreased for the amounts of expected premium receipts recognised as insurance
revenue for the services provided in the period; and
d.increased for the amortisation of insurance acquisition cash flows in the period
recognised as insurance service expenses.
82
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2.Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(d)Measurement - continued
Contracts measured under the PAA - continued
For reinsurance contracts held, at each of the subsequent reporting dates, the remaining
coverage is:
a. increased for ceding premiums paid in the period;
b. decreased for the expected amounts of ceding premiums, net of reinsurance
commissions, recognised as reinsurance expenses for the services received in the
period.
The Group does not adjust the LRC for insurance contracts issued and the remaining
coverage for reinsurance contracts held for the effect of the time value of money,
because insurance premiums are due within the coverage period of contracts, which is
one year or less.
For contracts measured under the PAA, the LIC is measured similarly to the LIC’s
measurement under the GMM. Future cash flows are adjusted for the time value of
money, since insurance contracts issued by the Group and measured under the PAA
may have a settlement period of over one year.
If facts and circumstances indicate that a group of insurance contracts measured under
the PAA is onerous on initial recognition or becomes onerous subsequently, the Group
increases the carrying amount of the LRC by the loss component which is determined
by the percentage of onerosity as a function of the LRC for the remaining period.
Subsequently, the loss component is remeasured at each reporting date as the change in
the percentage of onerosity as a function of the LRC for the remaining period.
Movements in the loss component are recorded in the insurance service expenses.
Onerosity of a group of insurance contracts does not automatically indicate that a
reinsurance contract held, protecting such onerous underlying group of contracts will
result in a net gain at initial recognition. However, for reinsurance contract held for
which there is a net gain at initial recognition or becomes so subsequently, the carrying
amount of the asset for remaining coverage (ARC) for reinsurance contracts held
measured under the PAA is increased by the amount of loss-recovery component. The
loss-recovery component is calculated by multiplying the percentage of onerosity as a
function of reinsurance ARC for the remaining period. Movements in the loss-recovery
component are recorded in the net reinsurance expenses.
The Company does not have any reinsurance contracts held measured under the PAA
with underlying contracts measured under the GMM.
83
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2.Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held
- continued
(e) Amounts recognised in profit or loss
Insurance revenue
As the Group provides insurance contract services under the group of insurance
contracts, it reduces the LRC and recognises insurance revenue. The amount of
insurance revenue recognised in the reporting period depicts the transfer of promised
services at an amount that reflects the portion of consideration that the Group expects to
be entitled to in exchange for those services.
For contracts not measured under the PAA, insurance revenue comprises the following:
• Amounts relating to the changes in the LRC:
a. claims and other directly attributable expenses incurred in the period measured
at the amounts expected at the beginning of the period, excluding:
– repayments of investment components and policyholder rights to withdraw
an amount;
– amounts of transaction-based taxes collected in a fiduciary capacity;
– insurance acquisition expenses; and
– amounts related to the risk adjustment for non-financial risk (see (b));
b. changes in the risk adjustment for non-financial risk, excluding:
– changes included in insurance finance income (expenses);and
– changes that relate to future coverage (which adjust the CSM);
c. amounts of the CSM recognised for the services provided in the period;
d. experience adjustments – arising from premiums received in the period other
than those that relate to future service; and
e. other amounts.
• Insurance acquisition cash flows recovery is determined by allocating the portion of
premiums related to the recovery of those cash flows on the basis of the passage of
time over the expected coverage of a group of contracts.
For groups of insurance contracts measured under the PAA, the Group recognises
insurance revenue based on the passage of time over the coverage period of a group of
contracts.
84
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2.Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held -
continued
(e) Amounts recognised in profit or loss - continued
Insurance service expense
Insurance service expenses include the following:
a. incurred claims and benefits, excluding investment components;
b. other incurred directly attributable expenses;
c.insurance acquisition cash flows amortisation;
d. changes that relate to past service – changes in the FCF relating to the LIC; and
e. onerous contract losses or reversals of those losses.
For contracts measured under the PAA, amortisation of insurance acquisition cash
flows is based on the passage of time.
Other expenses that do not meet the above criteria are included as other operating
expenses in the consolidated statement of profit or loss.
Net income (expenses) from reinsurance contracts held
The Group presents financial performance of groups of reinsurance contracts held on a
net basis in net income (expenses) from reinsurance contracts held, comprising the
following amounts:
a. rei nsurance expenses;
b. incurred claims recovery;
c. other incurred directly attributable expenses;
d. changes that relate to past service i.e. changes in the FCF relating to incurred claims
recovery; and
e. effect of changes in the risk of reinsurers’ non-performance.
Reinsurance expenses are recognised similarly to insurance revenue. The amount of
reinsurance expenses recognised in the reporting period depicts the transfer of received
insurance contract services at an amount that reflects the portion of ceding premiums
that the Group expects to pay in exchange for those services.
85
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2.Accounting policies - continued
2.10 Insurance and investment contracts issued and reinsurance contracts held -
continued
(e)Amounts recognised in profit or loss - continued
Net income (expenses) from reinsurance contracts held - continued
For contracts not measured under PAA, reinsurance expenses comprise the following
amounts relating to the changes in the remaining coverage:
a. claims and other directly attributable expenses recovery in the period, measured at
the amounts expected to be incurred at the beginning of the period, excluding
amounts related to the risk adjustment for non-financial risk (see b);
b. changes in the risk adjustment for non-financial risk, excluding:
– changes included in finance income (expenses) from reinsurance contracts held;
and
– changes that relate to future coverage (which adjust the CSM);
c. amounts of the CSM recognised for the services received in the period; and
d. experience adjustments arising from premiums paid in the period other than those
relating to future service.
For groups of reinsurance contracts held measured under the PAA, the Group
recognises reinsurance expenses based on the passage of time over the coverage period
of a group of contracts.
Ceding commissions that are not contingent on claims of the underlying contracts issued
reduce ceding premiums and are accounted for as part of reinsurance expenses. Ceding
commissions that are contingent on claims of the underlying contracts issued reduce
incurred claims recovery.
Insurance finance income or expenses
Insurance finance income or expenses comprise the change in the carrying amount of
the group of insurance contracts arising from:
a. the effect of the time value of money and changes in the time value of money; and
b. the effect of financial risk and changes in financial risk.
For contracts measured under the PAA, the main amounts within insurance finance
income or expenses are:
a. interest accreted on the LIC; and
b. the effect of changes in interest rates and other financial assumptions.
The Group disaggregates changes in the risk adjustment for non-financial risk between
insurance service result and insurance finance income or expenses.
For contracts measured under the GMM, the main amounts within insurance finance
income or expenses are:
a. interest accreted on the FCF and the CSM; and
b.the effect of changes in interest rates and other financial assumptions.
86
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2.Accounting policies - continued
2.10 Insurance and investment contracts - continued
(e)Amounts recognised in profit or loss - continued
Insurance finance income or expenses - continued
For contracts measured under the VFA, insurance finance income or expenses comprise
changes in the value of underlying items (excluding additions and withdrawals).
The Group has opted to include all its insurance finance income and expenses in profit
or loss for all of its insurance contracts. The Group does not issue insurance contracts
that generate cash flows in a foreign currency.
2.11 Current and deferred income tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in
the profit or loss account, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. The amount of current tax payable or
receivable is the best estimate of the tax amount expected to be paid or received that
reflects uncertainty related to income taxes, if any.
The current income tax charge is calculated on the basis of the tax laws enacted or
substantively enacted at the statement of financial position date in the countries where
the Company’s subsidiaries and associates operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation and establishes
provision where appropriate.
Deferred income tax is recognised in respect of temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the financial
statements. However, if the deferred income tax arises from initial recognition of an
asset or liability in a transaction other than a business combination that at the time of
the transaction affects neither accounting nor taxable profit or loss, it is not accounted
for. Deferred income tax is measured at the tax rates that are expected to be applied to
temporary differences when they reverse, using tax rates (and laws) that have been
enacted or substantively enacted at the reporting date and reflect uncertainty relating to
income taxes, if any. Deferred tax is expected to apply when the related deferred tax
asset is realised or the deferred tax liability is settled.
Deferred tax assets are recognised only to the extent that future taxable profit or taxable
capital gains will be available such that realisation of the related tax benefit is probable.
Deferred income tax is provided on temporary differences arising on investments in
subsidiaries and associates, except where the Group controls the timing of the reversal
of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
87
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2.Accounting policies - continued
2.11 Current and deferred income tax - continued
If the amount of taxable temporary differences is insufficient to recognise a deferred tax
asset in full, then future taxable profits, adjusted for reversals of existing temporary
differences are considered. Deferred tax assets are reviewed at each reporting date and
are reduced to the extent that it is no longer probable that the related tax benefit will be
realised; such reductions are reversed when the probability of future taxable profit
improves.
Deferred income tax assets and liabilities are offset when there is a legally enforceable
right to offset current tax assets against current tax liabilities and when the deferred
income tax assets and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities where there is an
intention to settle the balance on a net basis.
Deferred tax related to fair value re-measurements charged or credited directly in other
comprehensive income or to equity, is also credited or charged directly to equity and
subsequently recognised in the profit or loss account together with the deferred gain or
loss.
2.12 Provisions for pension obligations
Provisions are recognised when the Group has a present legal or constructive obligation
as a result of past events, it is probable that an outflow of resources will be required to
settle the obligation, and a reliable estimate of the amount can be made.
A defined benefit plan defines an amount of pension that an employee will receive on
retirement. In the Group’s case, this amount is dependent upon an employee’s final
compensation upon retirement.
The liability recognised in the statement of financial position is the present value of the
defined benefit obligation at the end of the reporting period. The present value of a
defined benefit obligation is determined by discounting the estimated future cash
outflows using interest rate yields of government or high-quality corporate bonds that
are denominated in the currency in which the benefits will be paid, and that have terms
to maturity approximating to the terms of the related pension liability. Actuarial gains
and losses arising from experience adjustments and changes in assumptions are charged
or credited to other comprehensive income in the period in which they arise.
2.13 Revenue recognition
R evenue comprises the fair value of the consideration received or receivable for the
sale of services in the ordinary course of the Group’s activities. The Group recognises
revenue when the amount of revenue can be reliably measured, it is probable that future
economic benefits will flow to the entity and when specific criteria have been met as
described below.
88
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2.Accounting policies - continued
2.13 Revenue recognition - continued
Rendering of services
Insurance revenue recognition is described in Note 2.10 dealing with insurance
contracts and investment contracts with DPF.
Revenue arising from the issue of investment contracts without DPF and other related
services offered by the Group, is recognised in the accounting period in which the
services are rendered.
Fees include investment management fees arising from services rendered in
conjunction with the issue and management of investment contracts where the Group
actively manages the consideration received from its customers to fund a return that is
based on the investment profile that the customer selected on origination of the
instrument. The Group recognises these fees on a straight-line basis over the estimated
life of the contract.
The Group charges its customers for management and other related services using the
following different approaches:
– Front-end fees are charged to the client on inception. The consideration received is
deferred as a liability and recognised over the life of the contract on a straight-line
basis.
– Regular fees are charged to the customer periodically (monthly, quarterly, half
yearly or annually) either directly or by making a deduction from invested funds.
Regular charges billed in advance are recognised on a straight-line basis over the
billing period.
Other revenue receivable by the Group mainly comprises commission or trailer fees
receivable on account of investment or other services provided in an intermediary
capacity which is accounted for on an accruals basis.
2.14 Investment return
Investment return includes dividend income, net gains or losses on financial assets at
fair value through profit or loss, interest income from financial assets not classified as
fair value through profit or loss, rental income receivable, share of associated
undertaking’s result, and other fair value movements of investment properties, and is
net of other investment expenses.
(a) Dividend income
Dividend income from subsidiary and associated undertakings is recognised in the
profit or loss account as part of investment income when the right to receive payment is
established.
89
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2.Accounting policies - continued
2.14 Investment return - continued
(b) Net fair value gains/(losses) from financial assets at fair value through profit or
loss
This category includes gains or losses arising from changes in the fair value of the
financial assets at fair value through profit or loss in the year in which they arise,
dividend income recognised when the right to receive payment is established and
interest income received on financial assets at fair value through profit or loss.
(c) Interest income
Interest income from financial assets not classified as fair value through profit or loss is
recognised using the effective interest method.
(d) Investment income from investment properties
Rental income from investment property is accounted for on an accruals basis in
accordance with the substance of the relevant lease agreements.
2.15 Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease.
A contract is or contains a lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration. To assess whether a
contract conveys the right to control the use of an identified asset, the Group uses the
definition of a lease in IFRS 16.
(a) As a lessor
When the Group acts as a lessor, it determines at lease inception whether each lease is a
finance lease or an operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease
transfers substantially all of the risks and rewards incidental to ownership of the
underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an
operating lease. As part of this assessment, the Group considers certain indicators such
as whether the lease is for the major part of the economic life of the asset.
The Group recognises lease payments received under operating leases as income on a
straight-line basis over the lease term as part of ‘other income’ – Note 9.
90
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2.Accounting policies - continued
2.15 Leases - continued
(b) As a lessee
At commencement or on modification of a contract that contains a lease component, the
Group allocates the consideration in the contract to each lease component on the basis
of its relative stand-alone prices.
The Group recognises a right-of-use asset and a lease liability at the lease
commencement date. The right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability adjusted for any lease payments made
at or before the commencement date, plus any initial direct costs incurred. The right-of-
use asset is subsequently depreciated using the straight-line method from the
commencement date to the end of the lease term.
The lease liability is initially measured at the present value of the lease payments that
are not paid at the commencement date, discounted using the interest rate implicit in the
lease or, if that rate cannot be readily determined, the Group’s incremental borrowing
rate. Generally, the Company uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise of fixed
payments.
The lease liability is measured at amortised cost using the effective interest method. It is
remeasured when there is a change in future lease payments. When the lease liability is
remeasured in this way, a corresponding adjustment is made to the carrying amount of
the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-
of-use asset has been reduced to zero.
2.16 Impairment of non-financial assets
Assets that have an indefinite useful life and are not subject to amortisation, or assets
not yet available for use, are tested annually for impairment. Assets that are subject to
amortisation or depreciation are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair
value less costs to sell and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are separately identifiable and
independent cash flows (cash-generating units).
91
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
2.Accounting policies - continued
2.17 Offsetting
Financial assets and liabilities are offset and the net amount reported in the statement of
financial position when, and only when the Group currently has a legally enforceable
right to set-off the recognised amounts and it intends to settle them on a net basis, or to
realise the asset and settle the liability simultaneously. Income and expenses are
presented on a net basis only when it is required or permitted by a standard – e.g. gains
and losses arising from a group of similar transactions such as the gains and losses on
financial assets measured at FVTPL.
2.18 Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the
period in which an obligation to pay a dividend is established.
2.19 Share capital
Shares are classified as equity when there is no obligation to transfer cash or other
assets. Incremental costs directly attributable to the issue of new shares are shown in
equity as a deduction from the proceeds net of tax.
3.Use of accounting estimates and judgements in applying accounting policies
The Group makes estimates and assumptions concerning the future. Estimates and
judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under
the circumstances.
Information about judgements made in applying accounting policies that have the most
significant effects on the amounts recognised in the financial statements is included in
the following notes, which also include information about assumptions and
uncertainties at 31 December 2025 that have a significant risk of resulting in a material
adjustment in the carrying amounts of assets and liabilities in the next financial year.
92
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
3.Use of accounting estimates and judgements in applying accounting policies -
continued
(a) Long-term contracts - insurance contract assets, insurance contract liabilities and
reinsurance contract liabilities
Insurance contract assets, insurance contract liabilities and reinsurance contract
liabilities are subject to an annual valuation using generally accepted accounting and
actuarial practice.
Different principles and valuation methodologies are adopted depending on the type
and generation of products. The key assumptions used in determining the measurement
of insurance contract assets, insurance contract liabilities and reinsurance contract
liabilities are described in Note 24.6 to the financial statements.
b) Sho rt-term insurance contracts under PAA - liability for incurred claims
Liability of incurred claims (LIC) of short-term business insurance contracts, measured
under the PAA, comprise of the estimates of future cash flows, adjusted to reflect the
time value of money and a risk adjustment for non-financial risks. The estimates of
future cash flows is derived using a standard actuarial claims projection technique, the
Chain Ladder method, other than for non-motor large losses. The key assumptions
underlying this technique is that past claims development experience can be used to
project future claims development.
Claims reserves which exceed a certain quantum (large losses), particularly those
involving fatalities and/or serious bodily injuries, are initially reserved at the case-by-
case reserve estimate. The measurement of claim payments due by the Group involves
the assessment of future settlements and is therefore dependent on assumptions around
determining such reserves based on, among others, legal precedent and current trends in
compensation awards. Specifically for Motor large losses, the Chain Ladder Method is
subsequently used to project the ultimate cost of these claims.
More detail on the key assumptions used in determining the LIC in respect of short-
term insurance contracts under PAA are described in Note 24.2 (a) to the financial
statements.
(c) Consolidation of entities in which the Group holds less than majority of voting
rights
The Group considers that it controls MAPFRE MSV Life p.l.c. (‘MMSV’) even though
it does not own more than 50% of the voting rights. This is because strategic, operating
and financing policies of MMSV are directed by means of shareholders’ agreement
which provides MAPFRE Middlesea p.l.c. with the right to select, appoint and remove
the key management personnel of MMSV and approve its business plan and capital
expenditure.
93
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
3.Use of accounting estimates and judgements in applying accounting policies -
continued
c) Consolidation of entities in which the Group holds less than majority of voting rights
- continued
For all the financial years up to 31 December 2010, MMSV was considered to be an
associate and was accounted for using the equity method. Following the shareholders’
agreement, on 29 July 2011, MAPFRE Middlesea p.l.c. acquired control over MMSV
based on the factors explained in this note and started consolidating MMSV as from
that date.
4. Management of ris k
The Group is a party to contracts that transfer insurance risk and/or financial risk. This
section summarises these risks and the way that the Group manages them.
The following table describes the composition of the underlying items for long-term
contracts with direct participation features:

| 2025 | 2024
| €'000 | €'000
Cash at bank and in hand | 6,632 | 21,490
Deposits with banks and credit institutions | 30,032 | 9,108
Debt securities | 941,256 | 955,212
Equity securities and units in unit trusts | 802,402 | 823,008
Assets held to cover linked liabilities - collective investment schemes | 39,331 | 36,330
Investment in associated undertakings | 947 | 5,793
Investment property | 93,769 | 93,127
Forward foreign exchange contracts and swaps | 2,209 | —
Total investment assets and cash and cash equivalents | 1,916,578 | 1,944,068
Insurance contract liabilities | (1,928,847) | (1,948,078)
Forward foreign exchange contracts and swaps | (638) | (6,816)

4.1 Insurance risk
The risk under any one insurance contract is the possibility that the insured event occurs
and the uncertainty of the amount of the resulting claim. By the very nature of an
insurance contract, this risk is fortuitous, however, it can be predicted with a certain
disclosed level of reliability.
94
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.1 Insurance risk - continued
For a portfolio of insurance contracts where the theory of probability is applied to
pricing and provisioning, the principal risk that the Group faces under its insurance
contracts is that the actual claims and benefit payments are significantly different to the
amounts included within insurance/reinsurance contract liabilities and assets. This
could occur because the frequency or severity of claims and benefits are greater than
estimated. Insurance events are fortuitous and the actual number and amount of claims
and benefits may vary from year to year from the estimate established using statistical
and actuarial techniques.
Experience shows that the larger the portfolio of similar insurance contracts, the smaller
the relative variability of the expected outcome will be. In addition, a more diversified
portfolio is less likely to be affected across the board by a change in any subset of the
portfolio. The Group manages this risk through adequate reinsurance arrangements and
proactive claims handling.
The Group has developed its insurance underwriting strategy to diversify the type of
insurance risk accepted and within each of these categories to achieve a sufficiently
large population of risks to reduce the variability of the expected outcome. The
objective of the underwriting strategy is to ensure that the underwritten risks are well
diversified in terms of type and amount of risk. The variability of risks is improved by
the careful selection and implementation of underwriting strategies, which are designed
to ensure that risks are diversified in terms of type of risk and level of insured benefits.
Key risks arising from insurance contracts issued:

| Contract | Key risks | Risk mitigation
| Short-term contracts | Insurance risk – frequency and severity of claims | Underwriting strategy, adequate reinsurance arrangements and proactive claim handling
| Life risk - Term | Mortality risk: death of policyholder earlier than expected | Reinsurance with financially strong reinsurer and adequate underwriting
| Investment contracts with DPF | Market risk: investment return on underlying items falling below guaranteed minimum rates | Management discretion to determine amount and timing of policyholder bonus rates
|  | Interest rate risk: difference in duration and yield of assets and liabilities | Matching of asset and liability cash flows
| Unit-linked | Lapse risk: insufficient charges to cover acquisition expenses | Surrender penalties and review of charges

95
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4.Management of risk - continued
4.1 Insurance risk - continued
Factors that aggravate insurance risk include lack of risk diversification in terms of type
and amount of risk and lack of geographical spread. The Group is largely exposed to
insurance risk in one geographical area, Malta and in one currency, the Euro.
(a) Short-term business insurance contracts
Frequency and severity of claims
The terms and conditions of the contracts set out the bases for the determination of the
Group’s liability should the insured event occur. The risks underwritten include motor
(including third party liability), health, fire and other damage to property, other classes
and group life. Details of insurance revenue as well as insurance service expenses
analysed by segment are provided in the “Segment informatio n” (Note 7).
The frequency and severity of claims can be affected by several factors. The following
are considered by the Group to be the most significant:
-The increasing levels of court awards in cases where damages are suffered as a
result of injuries, the divergence of awards that is dependent on the territory of the
claim and the jurisdiction of the court, the effect of inflation due to the prolonged
period typically required to settle such cases; and
- The risk of a single event that can extensively affect a multiple of individual risks
to which the Group is exposed.
The Group manages these risks through its underwriting strategy, adequate reinsurance
arrangements and proactive claims handling.
The underwriting strategy ensures that the risks underwritten are well diversified in
terms of type and amount of risk. The Group follows strict underwriting guidelines and
sets limits on the overall retention of risk that it carries. Any risk in excess of this limit
is either reinsured under a facultative cover note or is declined. Underwriting limits are
in place to enforce appropriate risk selection criteria. In certain circumstances, certain
exclusions to risks are included within these guidelines. For example, the Group does
not insure US risks unless they are incidental. The Group can impose deductibles to
help manage its costs. It also uses its experience and expertise to mitigate the risk of
fraudulent claims. Insurance contracts also entitle the Group to pursue third parties for
payment of some or all of the costs (i.e. subrogation). A significant portion of the
Group’s business is underwritten through an agency distribution network.
Underwriting authority limits are set for individual agencies or branches, and any
contracts through which the Group is committed to cover risks in excess of these
authority limits require head office approval.
96
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4.Management of risk - continued
4.1 Insurance risk - continued
(a) Short-term business insurance contracts - continued
Frequency and severity of claims - continued
The Group has reinsurance protection in place for all classes of business. The type of
reinsurance cover, and the level of retention, is based on the Group’s internal risk
management assessment which takes into account the risk being covered, the sums
assured and the geographical location of the risk. The Board approves each reinsurance
programme on an annual basis. The reinsurance arrangements include a mix of
proportional, facultative and non-proportional covers, which limit the liability of the
Group to any one individual claim or event. Generally, the Group’s policy is to place
reinsurance with listed multinational reinsurance companies whose credit rating is not
less than BBB. No rating limitation shall apply to treaty placements with MAPFRE Re
or any MAPFRE Group company designated to write any or all of the MAPFRE Group
Reinsurance treaties. At 31 December 2025, MAPFRE Re’s rating stood at A. The
Board monitors the security rating of MAPFRE on a periodic basis.
The Group has specialised claims units dealing with the mitigation of risks surrounding
known claims. These units investigate and adjust claims as appropriate. Claims are
individually reviewed regularly, and are adjusted to reflect the latest information on the
underlying facts, current law, jurisdiction, contractual terms and conditions and other
factors. The Group actively manages and pursues early settlement of claims to reduce
its exposure to unpredictable developments. Authority limits are set for the settlement
of claims through the individual agents. Any claims incurred above these limits are
referred to head office for handling. In addition, all claims involving bodily injury are
referred to head office irrespective of their amount.
Concentration of insurance risk
Up until 31 December 2025, 100% of the Group’s business was written in Malta (2024:
100%). The portfolio is diversified in terms of type of business written, with motor
business comprising 44% (2024: 47%) and health comprising 20% (2024: 17%) and fire
and other property damage 19% (2023: 19%) of the total portfolio (including short-term
Group Life business). The remaining 17% (2024: 17%) of premium revenue is
generated across a spread of classes including marine, income protection, general
liability, travel and short-term group life. Further information on insurance revenue,
and insurance service expenses by insurance business class is provided in Note 7 to
these financial statements.
97
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4.Management of risk - continued
4.1 Insurance risk - continued
(a) Short-term business insurance contracts - continued
Sources of uncertainty in the estimation of future claim developments and payments
Claims on contracts are accounted for on a claims-occurrence basis. The Group is
liable for all insured events that occurred during the term of the contract, even if the
loss is discovered after the end of the contract term. Certain classes of business, most
notably those exposed to liability, can take several years to develop and are therefore
subject to a greater degree of uncertainty than other classes of business which are
typically settled in a shorter period of time.
The estimated cost of claims includes direct expenses to be incurred in settling claims,
net of the expected subrogation value and recoveries. The Group takes all reasonable
steps to ensure that it has appropriate information regarding its claims exposures.
However, given the uncertainty in establishing the liability for incurred claims, it is
possible that the final outcome will prove to be different from the original liability
established.
In calculating the estimated cost of unpaid claims, the Group considers the results of
estimation techniques that are based partly on known information at year-end and partly
on statistical analysis of historical experience.
Further details on the process of estimation is provided in Note 24.2 which also presents
the development of the estimate of future cash flows for claims incurred in a given year.
Sensitivity analysis to underwriting risk variables
The following tables present information on how reasonably possible changes in
assumptions made by the Company with regard to underwriting risk variables impact
product line insurance liabilities and profit or loss and equity before and after risk
mitigation by reinsurance contracts held. The analysis is based on a 5% upwards and
downwards change in the ultimate loss amount while holding all other assumptions
constant. In practice, this is unlikely to occur, and changes in some of the assumptions
might be correlated.
98
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4.Management of risk - continued
4.1 Insurance risk - continued
(a) Short-term business insurance contracts - continued
Sensitivity analysis to underwriting risk variables - continued

| 31 December 2025 | Impact on profit before income tax | Impact on equity
|  | Gross | Net | Gross | Net
|  | €'000 | €'000 | €'000 | €'000
| Non-life |  |  |  |
| Ultimate loss – 5% increase | (308) | (270) | (200) | (176)
| Ultimate loss – 5% decrease | 308 | 270 | 200 | 176
| 31 December 2024 | Impact on profit before income tax | Impact on equity
|  | Gross | Net | Gross | Net
|  | €'000 | €'000 | €'000 | €'000
| Non-life |  |  |  |
| Ultimate loss – 5% increase | (385) | (334) | (250) | (217)
| Ultimate loss – 5% decrease | 385 | 334 | 250 | 217

(b) Long term business insurance contracts
Frequency and severity of claims (Mortality risk)
For contracts where death is the insured risk, the most significant factor that could
increase the overall frequency of claims are epidemics or wide spread changes in
lifestyle resulting in earlier or more claims than expected.
At present these risks do not vary significantly in relation to the location of the risk
insured by the Group. However, undue concentration by amounts could have an impact
on the severity of benefit payments on a portfolio basis.
For contracts with fixed and guaranteed benefits and fixed future premiums, there are
no mitigating terms and conditions that reduce the insurance risk accepted. For
investment contracts with DPF, the participating nature of the contracts results in a
portion of the insurance risk being reduced over the term of policy. Investment
contracts with DPF carry negligible mortality risk.
T he Group manages these risks through its underwriting strategy and reinsurance
arrangements. The underwriting strategy is intended to ensure that the risks
underwritten are well diversified in terms of type of risk and level of insured benefits.
Medical selection is also included in the Group’s underwriting procedures with
premiums varied to reflect the health condition and life expectancy of the applicants.
99
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4.Management of risk - continued
4.1 Insurance risk - continued
(b) Long term business insurance contract s - continued
Frequency and severity of claims (Mortality risk) - continued
The Group has reinsurance protection in place to cover death claims. The type of
reinsurance cover and the level of retention for each risk are based on the Group’s
internal risk management assessment, which takes account of the nature of the risk
covered and the sum assured. The reinsurance programme is approved by the Board of
Directors ("the Board") annually. The reinsurance arrangements in place include a mix
of quota share, facultative, excess of loss and catastrophe protection, which limits the
liability of the Group to any one individual life or event. The Group’s reinsurance is
placed with listed multinational reinsurance companies whose rating is not less than A.
The mortality assumptions applied are disclosed in Note 24.
Policyholder lapse risk
Higher lapses than expected cause a loss of future profits and possibility of non-
recovery of sales expenses.
The amount of insurance risk is also subject to contract holder behaviour. On the
assumption that policyholders will make decisions rationally overall underwriting risk
can be assumed to be aggravated by such behaviour. For example, it is likely that
contract holders whose health has deteriorated significantly will be less inclined to
terminate contracts insuring death benefits than those contract holders remaining in
good health. This results in an increasing trend of expected mortality as the portfolio of
insurance contracts reduces due to voluntary terminations.
Unit-linked and with-profits policies, can be surrendered before maturity for a cash
surrender value specified in the contractual terms. Cash surrender value equals the
policyholder account/investment value at the time of termination, less any surrender
penalties. Through these penalties, policyholders are discouraged from surrendering
contracts earlier than policy maturity. As such, penalties mitigate the expense risk
arising from acquisition and other costs incurred when policies were issued, because
such costs were originally assumed to be spread over a longer period, since early
surrender was not expected.
The lapse assumptions applied are disclosed in Note 24.
100
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4.Management of risk - continued
4.1 Insurance risk - continued
(b) Long term business insurance contracts - continued
Expense Risk
Expense risk is the risk of unexpected increases in policy maintenance, claim handling
and other costs relating to fulfilment of insurance contracts. The risk is managed
through budgeting and periodic cost evaluations. Investment contracts with DPF carry
negligible expense risk.
The expense assumptions applied are disclosed in Note 24.
Market Risk
This risk is covered in Note 4.2 (a). The investment assets return and discount rate
assumptions are disclosed in Note 24.
Sensitivity analysis to underwriting risk variables
The following tables present information on how reasonably possible changes in
assumptions made by the Group with regard to underwriting risk variables impact
product line insurance liabilities and profit or loss and equity before and after risk
mitigation by reinsurance contracts held. The analysis is based on a change in an
assumption while holding all other assumptions constant. In practice, this is unlikely to
occur, and changes in some of the assumptions might be correlated.
101
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4.Management of risk - continued
4.1 Insurance risk - continued
(b) Long term business insurance contracts - continued
Sensitivity analysis to underwriting risk variables - continued

| 31 December 2025 | Impact on CSM | Impact on profit before income tax | Impact on equity
|  | Gross | Net | Gross | Net | Gross | Net
|  | €'000 | €'000 | €'000 | €'000 | €'000 | €'000
| Life Risk (Net) |  |  |  |  |  |
| Mortality rate – 10% increase | (4,411) | (1,901) | 174 | 92 | 113 | 60
| Mortality rate – 10% decrease | 4,408 | 1,903 | (179) | (94) | (116) | (61)
| Lapse rates – 10% increase | (1,822) | (288) | 282 | 27 | 183 | 18
| Lapse rates – 10% decrease | 1,822 | 288 | (282) | (27) | (183) | (18)
| Expenses – 10% increase | (1,629) | (2,068) | 14 | 16 | 9 | 10
| Expenses – 10% decrease | 1,629 | 2,068 | (14) | (16) | (9) | (10)
| Investment contracts with DPF |  |  |  |  |  |
| Mortality rate – 10% increase | (319) | (319) | 3 | 3 | 2 | 2
| Mortality rate – 10% decrease | 319 | 319 | (3) | (3) | (2) | (2)
| Lapse rates – 10% increase | (455) | (455) | 40 | 40 | 26 | 26
| Lapse rates – 10% decrease | 455 | 455 | (40) | (40) | (26) | (26)
| Expenses – 10% increase | (1,199) | (1,199) | (62) | (62) | (40) | (40)
| Expenses – 10% decrease | 1,199 | 1,199 | 62 | 62 | 40 | 40
| 31 December 2024 | Impact on CSM | Impact on profit before income tax | Impact on equity
|  | Gross | Net | Gross | Net | Gross | Net
|  | €'000 | €'000 | €'000 | €'000 | €'000 | €'000
| Life Risk (Net) |  |  |  |  |  |
| Mortality rate – 10% increase | (4,274) | (1,870) | (174) | (63) | (113) | (41)
| Mortality rate – 10% decrease | 4,269 | 1,872 | 172 | 63 | 112 | 41
| Lapse rates – 10% increase | (1,652) | (171) | 149 | 118 | 97 | 77
| Lapse rates – 10% decrease | 1,652 | 171 | (149) | (118) | (97) | (77)
| Expenses – 10% increase | (1,649) | (2,045) | (86) | (108) | (56) | (70)
| Expenses – 10% decrease | 1,649 | 2,045 | 86 | 108 | 56 | 70
| Investment contracts with DPF |  |  |  |  |  |
| Mortality rate – 10% increase | (311) | (311) | — | — | — | —
| Mortality rate – 10% decrease | 311 | 311 | — | — | — | —
| Lapse rates – 10% increase | 53 | 53 | 98 | 98 | 64 | 64
| Lapse rates – 10% decrease | (53) | (53) | (98) | (98) | (64) | (64)
| Expenses – 10% increase | (1,707) | (1,707) | (116) | (116) | (76) | (76)
| Expenses – 10% decrease | 1707 | 1707 | 116 | 116 | 76 | 76

102
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4.Management of risk - continued
4.1 Insurance risk - continued
(b) Long term business insurance contracts - continued
Sensitivity analysis to underwriting risk variables - continued
Changes in underwriting risk variables mainly affect the CSM, profit or loss and equity
as follows.

|  | GMM | VFA
| a. CSM | Changes in fulfilment cash flows, other than those recognised as insurance finance income or expenses | Changes in fulfilment cash flows
| b. Profit or loss | Changes in fulfilment cash flows that are recognised as insurance finance income or expenses in profit or loss and change in CSM release and /or coverage units | Changes in CSM release and /or coverage units
| c. Equity | The effect on profit or loss under b. after tax | The effect on profit or loss under b. after tax

4.2 Financial risk
The Group is exposed to financial risks through its financial assets, financial liabilities
and insurance contract assets and liabilities and reinsurance contracts assets and
liabilities. In particular, the key risk is that in the long term, the proceeds from its
financial assets are not sufficient to fund the obligations arising from its insurance and
investment contracts. The components of financial risks for the Group are market risk
(including cash flow and fair value interest rate risk, equity price risk and currency
risk), credit risk and liquidity risk. These risks arise from open positions in interest rate,
currency and equity products, all of which are exposed to general and specific market
movements. The risks that the Group primarily faces due to the nature of its assets and
liabilities are interest rate risk and equity price risk.
The Group has developed its Asset/Liability management framework to further support
the manner in which these risk positions are managed. It actively manages its assets to
achieve a competitive rate of return within risk objectives delineated by asset liquidity
measures, duration targets and credit quality parameters. The respective Investment
Committees review and approve investment strategies on a periodic basis ensuring that
assets are managed efficiently and within approved risk mandates.
(a) Market risk
Market risk comprises interest rate, equity price and foreign currency risks. These risks
arise from variability in fair values of financial instruments or related future cash flows,
as well as from variability of the FCF of insurance contracts due to variability in market
risk variables.
103
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4.Management of risk - continued
4.2 Financial risk - continued
(a) Market risk - continued
(i) Cash flow and fair value interest rate risk
Insurance and investment contracts with DPF at Group level have benefit payments that
are fixed and guaranteed at the inception of the contract (for example, sum assured), or
as annual discretionary bonuses are declared. The Group’s primary financial risk on
these contracts is the risk that interest income and capital redemptions from the
financial assets backing the liabilities are insufficient to fund the guaranteed benefits
payable.
The Group does not guarantee a positive fixed rate of return to its long-term contract
policyholders at the inception of a contract. The declaration of discretionary bonuses is
guided by the bonus philosophy of the Board. Once a reversionary bonus is declared, it
is guaranteed to be paid in full at maturity or on the prior death of the life assured. Also
policyholders have the option to withdraw their current year’s bonus without any
charges following the date the bonus is declared.
The bonus philosophy considers historic and current rates of return generated by the
Group’s investment portfolio as well as the Group’s expectations for future investment
returns. The impact of interest rate risk is mitigated by the presence of the DPF. These
guaranteed benefits increase as discretionary benefits are declared and allocated to
contract holders. The current rates of regular and final bonuses are determined by the
Board in consultation with the Approved Actuary. Different bonus rates are declared
on different generations of contracts depending on the type of product, cost structure,
past investment performance and premium rates. Different bonuses are declared to
maintain equity between different generations of contract holders and products with
different characteristics. Future bonus rates are not guaranteed and the assumptions are
set to allow for a fair and orderly run-off of the fund.
All unit-linked and investment contracts with a DPF feature can be surrendered before
maturity for a cash surrender value that is always less than the actual contract liability.
Cash surrender values are determined at the discretion of the Group, and can be varied
from time to time.
The primary factor affecting the level of cash surrender value is the investment return
earned on the assets of the Group. In addition, the cash surrender value is affected by
the expenses, tax and the cost of risk benefits (such as life cover) borne by the Group,
deductions to provide a return to shareholders, as well as profits and losses arising on
other contracts. The expenses include payment of commission, medical report expenses,
office administration costs and other expenses incurred in the setting up and
maintenance of the contract. At most, the cash surrender value will be the amount of the
actual liability reduced by the surrender charge (where applicable).
104
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(a) Market risk - continued
(i) Cash flow and fair value interest rate risk - continued
Furthermore, in respect of all with-profits (with the exception of some contracts that
have been in force more than a certain number of years), the Group reserves the right to
increase the level of the surrender charge and, if necessary, to apply a Market Value
Reduction (‘MVR’). A MVR is a deduction which the Group may make on surrender of
a contract with DPF. For example, if the underlying investment return, after allowing
for expenses, tax, risk benefits, shareholder returns and adjustment for profits or losses
on other contracts is less than the return already provided for in the form of
reversionary bonuses, the Group may decide to apply a MVR.
The MVR serves to protect the interests of remaining investors and the Group, who
would otherwise have to subsidise the amount paid on surrendering contracts. The
Group does not apply a standard percentage deduction on all contracts but determines
the deduction to apply to each individual surrender at the time the surrender is made.
The amount depends on a number of factors including the length of time the contract
has been in force and the underlying investment return over the same time period. There
will be no MVR at maturity or on death. This means that at maturity or on death the
payment of the actual contract liability is guaranteed.
The cash surrender value may also be less than the total amount of premiums paid up to
the date of surrender. The Group is not required to, and does not, measure the effect of
the above embedded derivative at fair value.
The Group matches its insurance contract liabilities with a diversified portfolio of assets
which includes equity, debt securities and property. The return from debt and cash-
based securities is subject to interest rate risk.
In general, the Group is exposed to risk associated with the effects of fluctuations in the
prevailing levels of market interest rates. Assets/liabilities issued at variable rates
generally expose the Group to cash flow interest risk. Assets/liabilities issued at fixed
rates generally expose the Group to fair value interest rate risk. Group investment
parameters exist to limit exposure to any one particular issuer and any one particular
security. Periodic reports are prepared at portfolio, legal entity and asset class level that
are circulated to the Group’s key management personnel. Note 22 incorporates maturity
information with respect to the Group's investments.
105
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(a) Market risk - continued
(i) Cash flow and fair value interest rate risk - continued
The total assets and liabilities exposed to interest rate risk are the following:

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Assets at floating interest rates | 100,729 | 93,884 | — | —
| Assets at fixed interest rates | 1,303,915 | 1,290,280 | 26,069 | 18,773
|  | 1,404,644 | 1,384,164 | 26,069 | 18,773

Reconciled to the notes to the financial statements as follows:

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €'000 | €'000
| Debt securities (Note 22) | 1,012,362 | 1,020,445 | 22,069 | 16,273
| Deposits with banks and credit institutions (Note 22) | 59,983 | 39,657 | — | —
| A component of equity securities and units in unit trusts | 328,142 | 321,387 | — | —
| Interest bearing cash and cash equivalents | 4,157 | 2,675 | 4,000 | 2,500
|  | 1,404,644 | 1,384,164 | 26,069 | 18,773

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €'000 | €'000
| Insurance and reinsurance contracts |  |  |  |
| Liabilities | (1,900,121) | (1,920,554) | (37,657) | (37,710)
| Assets | 15,437 | 19,783 | 8,446 | 9,203
|  | (1,884,684) | (1,900,771) | (29,211) | (28,507)

106
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(a) Market risk - continued
(i) Cash flow and fair value interest rate risk - continued
Interest rate risk in relation to hybrid contracts, amounting to €38.2 million (2024:
€35.2 million) has been excluded as the directors consider the exposure to be
insignificant.
In managing its portfolio, the Group entered into fixed income security futures
contracts. Accordingly, it is exposed to movements in interest rates in the respective
markets of the underlying, which comprise short, medium and long-term sovereign
debt. The notional amount of futures contracts outstanding at 31 December is shown
below:

| Group
| 2025 | 2024
| €’000 | €’000
Long positions |  |
- Federal Republic of Germany | 70,690 | 65,488
- United States Government | 11,154 | 17,884
| 81,844 | 83,372
Short positions |  |
- Federal Republic of Germany | 65,501 | 78,096
- United States Government | 6,777 | 18,601
| 72,278 | 96,697

Up to the reporting date, the Group did not have any hedging policy with respect to
interest rate risk other than as described in note 2.9.
107
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(a) Market risk - continued
(i) Cash flow and fair value interest rate risk - continued
Sensitivity analysis – interest rate risk
An analysis of the Group’s sensitivity to a 1% increase or decrease in market interest rates
at the reporting date, assuming that all other variables remain constant, is presented below.
A n explanation of the method used in preparing such sensitivity analysis and the main
parameters and assumptions underlying the information provided is found in Note 4.1.
Group

|  | CSM | Profit or loss before tax | Equity
|  | Increase | Decrease | Increase | Decrease | Increase | Decrease
|  | €’000 | €’000 | €’000 | €’000 | €’000 | €’000
| 31 December 2025 |  |  |  |  |  |
| Insurance and reinsurance contracts (net) | 398 | (440) | (221) | 150 | (143) | 98
| Investment contracts with DPF | 3,801 | (12,290) | 301 | (1,098) | 195 | (714)
| Other investments | — | — | — | — | (602) | 623
|  | 4,199 | (12,730) | 80 | (948) | (550) | 7
| 31 December 2024 |  |  |  |  |  |
| Insurance and reinsurance contracts (net) | 406 | (449) | 183 | (284) | 119 | (185)
| Investment contracts with DPF | 6,483 | (19,019) | 552 | (1,714) | 359 | (1,114)
| Other investments | — | — | — | — | (301) | 281
|  | 6,889 | (19,468) | 735 | (1,998) | 177 | (1,018)

Company

|  | Profit or loss before tax | Equity
|  | Increase | Decrease | Increase | Decrease
|  | €’000 | €’000 | €’000 | €’000
| 31 December 2025 |  |  |  |
| Insurance and reinsurance contracts (net) | 512 | (539) | 333 | (351)
| Other investments | — | — | (602) | 623
|  | 512 | (539) | (269) | 272
| 31 December 2024 |  |  |  |
| Insurance and reinsurance contracts (net) | 554 | (517) | 360 | (336)
| Other investments | — | — | (301) | 281
|  | 554 | (517) | 59 | (55)

108
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(a) Market risk - continued
(ii) Equity price risk
The Group’s financial assets are susceptible to the risk of decreases in value due to
changes in the prices of equities. The directors manage the risk of price volatility by
entering into a diverse range of investments including equities and collective
investment schemes. In addition, the Group’s investments are spread geographically in
a diverse number of different countries. The Group has active Investment Committees
that have established a set of investment guidelines that are also approved by the Board
of Directors. Investments over prescribed limits are directly approved by the respective
Boards. These guidelines provide parameters for investment management, including
contracts with external portfolio managers. They include, inter alia, reference to an
optimal spread of the investment portfolio, assessment of equity issuers and maximum
exposures by the Group to any one issuer and its connected parties (with the exception
of investments in Government paper). These parameters also consider solvency
restrictions imposed by the Regulator.
Management structures are in place to monitor all the Group’s overall market positions
on a regular basis. Reports are prepared at portfolio, legal entity and asset and liability
class level that are circulated to the Group’s relevant key management personnel. These
are also reviewed by the respective Investment Committees and Boards.
109
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(a) Market risk - continued
(ii) Equity price risks - continued
The total assets subject to equity price risk are the following:

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Assets subject to equity price risk | 560,764 | 561,742 | 3,119 | 2,813
| The above includes: |  |  |  |
| Component of investments in associated undertakings (Note 21)* | — | 4,805 | — | —
| A component of equity securities and units in unit trusts | 560,764 | 556,937 | 3,119 | 2,813
|  | 560,764 | 561,742 | 3,119 | 2,813

*Investments in associates (Note 21) amounting to €0.4 million (2024:€0.4 million) for
the Group and €0.4 million (2024: €0.4 million) for the Company have been excluded
from equity price risk since they are accounted for under the equity method.
In the case of assets held to cover unit-linked liabilities the exposure is carried by the
contract holder. In the case of capital guaranteed products any shortfalls guaranteed
upon maturity are mitigated by a back-to-back guarantee with international financial
service providers as further referred in 4.2 (a) (i).
The sensitivity for equity price risk illustrates how changes in the fair value of equity
securities (excluding investments in associated undertakings) will fluctuate because of
changes in market prices, whether those changes are caused by factors specific to the
individual equity issuer, or factors affecting all similar equity traded in the market.
110
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(a) Market risk - continued
(ii) Equity price risks - continued
An analysis of the Group’s sensitivity to a 10% decrease in equity prices at the
reporting date, assuming that all other variables remain constant, is presented below. An
explanation of the method used in preparing such a sensitivity analysis and the main
parameters and assumptions underlying the information provided is found in Note 4.1.
Group

|  | CSM | Profit or loss before tax | Equity
|  | €’000 | €’000 | €’000
| 31 December 2025 |  |  |
| Investment contracts with DPF | (1,182) | (175) | (114)
| Other investments | — | (312) | (268)
|  | (1,182) | (487) | (382)
| 31 December 2024 |  |  |
| Investment contracts with DPF | (3,580) | (381) | (248)
| Other investments | — | (281) | (241)
|  | (3,580) | (662) | (489)

Company

|  |  | Profit or loss before tax | Equity
|  |  | €’000 | €’000
| 31 December 2025 |  |  |
| Other investments |  | (312) | (268)
| 31 December 2024 |  |  |
| Other investments |  | (281) | (241)

111
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(a) Market risk - continued
(iii) Currency risk
The Group’s and Company’s liabilities are substantially denominated in euro. The
Group’s exposure to foreign currency risk arises primarily from both equity and debt
securities denominated in major foreign currencies. The Group hedges its foreign
currency denominated debt securities using foreign exchange forward contracts in order
to mitigate the risk that principal cash flows for these investments fluctuate as a result
of changes in foreign exchange rates.
The table below summarises the Group’s exposure to foreign currencies other than
euro.
Group

| 31 December 2025 | Net exposure before hedging | Notional amount of currency derivatives | Net exposure after hedging
|  | €’000 | €’000 | €’000
| Currency of exposure: |  |  |
| USD | 294,078 | 181,811 | 112,267
| CHF | 18,628 | — | 18,628
| GBP | 7,640 | 747 | 6,893
| SEK | 7,226 | — | 7,226
| DKK | 5,752 | — | 5,752
| HKD | 3,801 | — | 3,801
| Others | 20,851 | 3,948 | 16,903
|  | 357,976 | 186,506 | 171,470

112
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(a) Market risk - continued
(iii) Currency risk - continued
Group

| 31 December 2024 | Net exposure before hedging | Notional amount of currency derivatives | Net exposure after hedging
|  | €’000 | €’000 | €’000
| Currency of exposure: |  |  |
| USD | 307,311 | 178,616 | 128,695
| CHF | 15,318 | — | 15,318
| GBP | 12,142 | 6,121 | 6,021
| SEK | 7,337 | — | 7,337
| DKK | 8,318 | 951 | 7,367
| HKD | 1,987 | — | 1,987
| Others | 20,521 | (239) | 20,760
|  | 372,934 | 185,449 | 187,485

Within the table above, €166.5 million of the unhedged exposure relates to equity
investments (2024: €185.8 million). Due to an increasingly globalised economy, the
Group’s equity investments are diversified across various currencies. The directors
consider that the exposure to currency risk is appropriately captured in the equity price
risk sensitivity (Note 4.2(a)(ii)). Any residual currency exposure relating to non-equity
investments is not considered to be significant.
The table below summarises the Company’s exposure to foreign currencies other than
euro.
Company

| 31 December 2025 | Net exposure before hedging | Notional amount of currency derivates | Net exposure after hedging
|  | €’000 | €’000 | €’000
| Currency of exposure: |  |  |
| USD | 34 | — | 34
| GBP | 29 | — | 29
| Other | 16 | — | 16
|  | 79 | — | 79

113
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(a) Market risk - continued
(iii) Currency risk - continued
Company

| 31 December 2024 | Net exposure before hedging | Notional amount of currency derivates | Net exposure after hedging
|  | €’000 | €’000 | €’000
| Currency of exposure: |  |  |
| USD | 34 | — | 34
| GBP | 29 | — | 29
| Others | 16 | — | 16
|  | 79 | — | 79

The Company’s foreign exposure relates to foreign operations now in run-off.
(b) Credit risk
Credit risk is the risk of decreases in value when counterparties are not capable of
fulfilling their obligations or when a change in their credit status takes place. The Group
has exposure to credit risk, which is the risk that a counterparty will be unable to pay
amounts in full when due. Key areas where the Group is exposed to credit risk are:
• Investments and cash and cash equivalents
• Reinsurance contract assets
• Amounts due from insurance intermediaries
• Counterparty risk with respect to forward foreign exchange contracts
The Group places limits on the level of credit risk undertaken from the main categories
of financial instruments. These limits also take due consideration of the solvency
restrictions imposed by the relevant regulations. The investment strategy of the Group
considers the credit standing of the counterparty and control structures are in place to
assess and monitor these risk thresholds.
114
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(b) Credit risk - continued
The Group structures the levels of credit risk it accepts by limiting as far as possible its
exposure to a single counterparty or groups of counterparties. The Group has in place
internal control structures to assess and monitor credit exposures and risk thresholds.
The Group’s cash is placed with a number of core domestic credit institutions and
investment grade international banks, thereby reducing the concentration of
counterparty credit risk to an acceptable level.
Reinsurance is used to manage insurance risk. This does not, however, discharge the
Group’s liability as primary insurer. If a reinsurer fails to pay a claim for any reason,
the Group remains liable for the payment to the policyholder. The creditworthiness of
reinsurers is monitored on a quarterly basis by reviewing credit grades provided by
rating agencies and other publicly available financial information, thereby ensuring the
continuous financial strength of the reinsurer. At the same time that the Board approves
the overall reinsurance protection of the Group, it ensures that the reinsurers’ credit
rating (either Standard & Poor’s or equivalent) is within the parameters set by it.
The Group is exposed to contract holders and intermediaries for insurance revenue.
Credit agreements are in place in all cases where credit is granted, and in the case of
certain larger risks, premium payment warranties are in place. This limits the liability
of the Group towards the insured or any third party if the premium remains unsettled
after the credit period granted and allows the Group to cancel the policy ab initio, if
considered necessary. Records are kept of the payment history for significant contract
holders and intermediaries with whom regular business is conducted. Credit is not
granted to contract holders whose payment history is not satisfactory. Credit risk with
respect to debtors is further limited due to the large number of customers comprising
the Group’s debtor base.
The exposure to individual counterparties is also managed by other mechanisms, such
as the right to offset where counterparties are both debtors and creditors of the Group.
Management information reported to the Group includes details of provisions for
impairment on receivables and subsequent write-offs. The Company performs risk-
based reviews to assess the degree of compliance with the Group’s procedures on credit
and take action accordingly. In the case of MMSV, it is not normal for credit to be
extended to insurance policyholders due to the nature of their business, unless
automatic policy loans are advanced up to the surrender value of the contract.
The Group does not trade in derivative contracts, with the exception of forward
contracts and exchange traded futures. All derivative contracts are placed with quality
financial institutions within the parameters of a hedging policy approved by the Board.
115
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(b) Credit risk - continued
The total assets bearing credit risk are the following:

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Debt securities | 1,012,362 | 1,020,445 | 22,069 | 16,273
| Deposits with banks and credit institutions | 59,983 | 39,657 | — | —
| Forward foreign exchange contracts and swaps | 2,209 | — | — | —
| A component of reinsurance contract assets | 6,395 | 8,084 | 6,395 | 8,084
| Trade and other receivables (excluding prepayments) | 24,858 | 22,039 | 21,877 | 18,788
| Cash and cash equivalents | 50,244 | 81,899 | 14,559 | 13,908
| Total | 1,156,051 | 1,172,124 | 64,900 | 57,053

The carrying amounts disclosed above represent the maximum exposure to credit risk.
The component of reinsurance contract assets exposed to credit risk is analysed in the
table below using Standard & Poor’s rating (or equivalent).

|  |  | Group and Company
|  |  |  | 2025 | 2024
|  |  |  | €’000 | €’000
| AA |  |  | 167 | 122
| A |  |  | 5,896 | 7,446
| Below BBB or not rated |  |  | 332 | 516
|  |  |  | 6,395 | 8,084

116
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(b) Credit risk - continued
These assets other than the reinsurance contract assets are analysed in the table below
using Standard & Poor’s rating (or equivalent).

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| AAA | 97,564 | 84,353 | 3,642 | 4,085
| AA | 129,341 | 232,871 | 5,265 | 2,522
| A | 505,410 | 440,982 | 13,720 | 7,690
| BBB | 314,384 | 317,688 | 10,926 | 13,013
| Below BBB or not rated | 102,957 | 88,146 | 24,952 | 21,659
|  | 1,149,656 | 1,164,040 | 58,505 | 48,969

Debt securities, receivables and cash and cash equivalents that are not rated are
primarily held with highly reputable financial institutions.
The Group does not hold any collateral as security to its credit risk.
117
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(b) Credit risk - continued
Financial assets that are past due but not impaired
The following other assets are classified as past due but not impaired:

|  |  | Group and Company
|  |  |  | 2025 | 2024
|  |  |  | €’000 | €’000
| Within credit terms |  |  | 9,673 | 10,737
| Not more than three months |  |  | 3,712 | 3,821
| Within three to twelve months |  |  | 2,055 | 1,875
| Over twelve months |  |  | 921 | 1,063
|  |  |  | 16,361 | 17,496

IFRS 7 defines a financial asset as being past due when the counterparty has failed to
make a payment when contractually due. It goes further to stipulate that full disclosure
must be made of all balances due from this particular counterparty, including those,
which are still within credit terms and therefore not contractually due.
The overall exposure of the Group and Company in terms of IFRS 7 is €16.4 million
(2024: €17.5 million), of which €9.7 million (2024: €10.7 million) is not contractually
due. It is the view of the directors that no impairment charge is necessary, due to the
following reasons:
1. Settlements after year-end.
2. In cases where the amount has not been settled, agreement for settlement has been
reached or is being negotiated.
Trade receivables at 31 December 2025 did not comprise any amounts (2024: nil)
whose terms had been renegotiated from the original terms and which were classified as
fully performing.
F inancial assets that are impaired
Within trade receivables are the following receivables that are classified as impaired
against which a provision for impairment has been provided as per Note 26:

|  |  | Group and Company
|  |  |  | 2025 | 2024
|  |  |  | €’000 | €’000
| Over twelve months (Note 26) |  |  | 869 | 717

118
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(b) Credit risk - continued
A decision to impair an asset is based on the following information that comes to the
attention of the Group:
• Significant financial difficulty of the debtor.
• It becoming probable that the debtor will enter bankruptcy or other financial
reorganisation.
• A breach of contract, such as protracted default in payments
• The debtor has been referred to the in-house legal office.
(c) Liquidity risk
The Group is exposed to daily calls on its available cash resources mainly from claims
and benefits arising from insurance contracts. Liquidity risk is the risk that cash may
not be available to pay obligations when due at a reasonable cost. The Group manages
its funds in such a manner as to ensure an adequate portion of available funds to meet
such calls. With respect to life insurance contracts this is principally managed through
limits set by the Board of MMSV on the minimum proportion of maturity funds
available to meet such calls. Furthermore, the Group invests a majority of its assets in
listed investments that can be readily disposed of.
The following table indicates the expected timing of cash flows arising from the
maturity or settlement of Group’s liabilities. The expected cash flows do not consider
the impact of early surrenders on life insurance contracts.
119
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(c) Liquidity risk - continued

|  | Group expected cash flows (€ millions) 2025
|  | Payable on demand | 0-1 yr | 1-2 yrs | 2-3 yrs | 3-4 yrs | 4-5 yrs | >5 yrs | Total
|  | Undiscounted | Discounted | Discounted | Discounted | Discounted | Discounted | Discounted | Discounted
| Insurance contract assets - Life insurance contracts | 3.0 | (10.0) | (8.0) | (7.0) | (6.0) | (5.0) | (27.0) | (60.0)
| Insurance contract liabilities - Life insurance contracts | 50.0 | 186.0 | 142.0 | 163.0 | 182.0 | 176.0 | 910.0 | 1,809.0
| Reinsurance contract liabilities | 7.0 | 3.0 | 3.0 | 2.0 | 2.0 | 2.0 | 17.0 | 36.0
| Insurance contract liabilities – liabilities for incurred claims short- term contracts under PAA | — | 19.5 | 6.1 | 3.4 | 2.4 | 1.4 | 3.5 | 36.3
| Lease liabilities | — | 0.5 | 0.3 | 0.3 | 0.3 | 0.2 | 0.6 | 2.2
| Other payables | 19.9 | — | — | — | — | — | — | 19.9

|  | Group expected cash flows (€ millions) 2024
|  | Payable on demand | 0-1 yr | 1-2 yrs | 2-3 yrs | 3-4 yrs | 4-5 yrs | >5 yrs | Total
|  | Undiscounted | Discounted | Discounted | Discounted | Discounted | Discounted | Discounted | Discounted
| Insurance contract assets - Life insurance contracts | 4.0 | (9.0) | (8.0) | (7.0) | (6.0) | (5.0) | (25.0) | (56.0)
| Insurance contract liabilities - Life insurance contracts | 56.0 | 175.0 | 163.0 | 133.0 | 152.0 | 171.0 | 984.0 | 1,834.0
| Reinsurance contract liabilities | 6.0 | 3.0 | 2.0 | 2.0 | 2.0 | 2.0 | 20.0 | 37.0
| Insurance contract liabilities – liabilities for incurred claims short-term contracts under PAA | — | 18.2 | 6.3 | 3.4 | 2.9 | 2.2 | 3.8 | 36.8
| Lease liabilities | — | 0.4 | 0.3 | 0.3 | 0.2 | 0.2 | 0.4 | 1.8
| Other payables | 18.2 | — | — | — | — | — | — | 18.2

Expected cash flows on unit linked liabilities, presented under investment contract
liabilities amounting to €229.7 million (2024:€179.7 million) and as part of insurance
contract liabilities €35.7 million (2024: €39.2 million), have not been included as the
directors consider that there is limited exposure to liquidity risk given that these are
principally backed by unit linked assets.
The amounts which are undiscounted and payable on demand mainly consist of long-
term contracts claims outstanding.
120
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(c) Liquidity risk - continued

|  | Company expected cash flows (€ millions) 2025
|  | Payable on demand | 0-1 yr | 1-2 yrs | 2-3 yrs | 3-4 yrs | 4-5 yrs | >5 yrs | Total
|  | Undiscounted | Discounted | Discounted | Discounted | Discounted | Discounted | Discounted | Discounted
| Insurance contract liabilities – liabilities for incurred claims short-term contracts under PAA | — | 19.5 | 6.1 | 3.4 | 2.4 | 1.4 | 3.5 | 36.3
| Lease liabilities | — | 0.4 | 0.3 | 0.3 | 0.3 | 0.2 | 0.6 | 2.1
| Other payables | 8.5 | — | — | — | — | — | — | 8.5

|  | Company expected cash flows (€ millions) 2024
|  | Payable on demand | 0-1 yr | 1-2 yrs | 2-3 yrs | 3-4 yrs | 4-5 yrs | >5 yrs | Total
|  | Undiscounted | Discounted | Discounted | Discounted | Discounted | Discounted | Discounted | Discounted
| Insurance contract liabilities – liabilities for incurred claims short-term contracts under PAA | — | 18.2 | 6.3 | 3.4 | 2.9 | 2.2 | 3.8 | 36.8
| Lease liabilities | — | 0.3 | 0.3 | 0.3 | 0.2 | 0.2 | 0.4 | 1.7
| Other payables | 9.1 | — | — | — | — | — | — | 9.1

121
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4. Management of risk - continued
4.2 Financial risk - continued
(c) Liquidity risk - continued
The table below analyses the Group’s derivative financial instruments that will be
settled on a gross basis. The amounts disclosed in the table are the contractual
undiscounted cash flows. Balances due within 12 months equal their carrying balances,
as the impact of discounting is not significant.

|  | Group
|  | 2025 | 2024
|  | €’000 | €’000
| At 31 December |  |
| Foreign exchange contracts |  |
| - outflow | (358,492) | (211,300)
| - inflow | 360,701 | 204,484

At 31 December 2025 and 2024, the above derivatives were due to be settled within
three months after year end.
122
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4.Management of risk - continued
4.3 Fair values
The following table presents the assets measured in the statement of financial position
at fair value by level of the following fair value measurement hierarchy at 31 December
2025:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities
(Level 1);
• Inputs other than quoted prices included within Level 1 that are observable for
the asset or liability, either directly (that is, as prices) or indirectly (that is,
derived from prices) (Level 2); and
• Inputs for the asset or liability that are not based on observable market data
(that is, unobservable inputs) (Level 3).
The Group recognises transfers between levels of the fair value hierarchy at the end of
the reporting period during which the change has occurred.
The following tables present the assets and liabilities measured at fair value at 31
December 2025.

| Group |  |  |  |
|  | Level 1 | Level 2 | Level 3 | Total
|  | €'000 | €'000 | €'000 | €'000
| Assets |  |  |  |
| Financial assets at fair value through profit or loss |  |  |  |
| - Equity securities, units in unit trusts and collective investment schemes | 911,971 | 142,863 | 101,319 | 1,156,153
| - Debt securities | 549,047 | 392,209 | — | 941,256
| Debt securities at FVOCI | 9,900 | 12,169 | — | 22,069
| Forward foreign exchange contracts and swaps | — | 2,209 | — | 2,209
| Total assets | 1,470,918 | 549,450 | 101,319 | 2,121,687

| Liabilities |  |  |  |
| Investment contract liabilities | — | 229,748 | — | 229,748
| Forward foreign exchange contracts and swaps | — | 638 | — | 638
| Total liabilities | — | 230,386 | — | 230,386

123
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4.Management of risk - continued
4.3 Fair values - continued

| Company |  |  |
|  | Level 1 | Level 2 | Total
|  | €'000 | €'000 | €'000
| Assets |  |  |
| Financial assets at fair value through profit or loss |  |  |
| - Equity securities, units in unit trusts and collective investment schemes | 845 | 2,274 | 3,119
| Debt securities at FVOCI | 9,900 | 12,169 | 22,069
| Total assets | 10,745 | 14,443 | 25,188

The following tables present the assets measured at fair value at 31 December 2024.

| Group |  |  |  |
|  | Level 1 | Level 2 | Level 3 | Total
|  | €'000 | €'000 | €'000 | €'000
| Assets |  |  |  |
| Financial assets at fair value through profit or loss |  |  |  |
| - Equity Securities, units in unit trusts and collective investment schemes | 874,858 | 123,120 | 101,480 | 1,099,458
| - Debt Securities | 567,135 | 388,077 | — | 955,212
| Debt securities at FVOCI | 8,946 | 7,327 | — | 16,273
| Forward foreign exchange contracts and swaps | — | 4,805 | — | 4,805
| Investment in associated undertakings | — | — | — | —
| Total assets | 1,450,939 | 523,329 | 101,480 | 2,075,748

| Liabilities |  |  |  |
| Investment contract liabilities | — | 179,685 | — | 179,685
| Forward foreign exchange contracts and swaps | — | 6,816 | — | 6,816
| Total liabilities | — | 186,501 | — | 186,501

124
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4.Management of risk - continued
4.3 Fair values - continued

| Company | Level 1 | Level 2 | Total
|  | €'000 | €'000 | €'000
| Assets |  |  |
| Financial assets at fair value through profit or loss |  |  |
| -Equity securities, units in unit trusts and collective investment schemes | 762 | 2,050 | 2,812
| Debt securities at FVOCI | 8,946 | 7,327 | 16,273
| Total assets | 9,708 | 9,377 | 19,085

Fair value measurements classified as Level 1 include government debt securities, units
in unit trusts and collective investments schemes and foreign listed equities.
Corporate debt securities are classified as Level 2 in view of their trading
characteristics. The financial liabilities for unit-linked contracts were also classified as
Level 2. The fair value of these contracts is determined using the current unit values
that reflect the fair values of the financial assets (classified as Level 1) linked to the
financial liability. D erivative foreign exchange forward contracts have been classified
as Level 2. The fair value of these instruments is determined by reference to market
observable forward currency rates and interest rates. Domestic equities are classified as
Level 2 in view of their trading characteristics.
At 31 December 2025, 4.8% (2024:4.9%) of the financial assets measured at fair value
on a recurring basis were classified as Level 3. They constitute investment in unlisted
equities. The Group has €101.3 million (2024:€101.5 million) assets classified as Level
3, the valuation of which has been determined by reference to the latest available net
asset values of the underlying investment or the latest transaction price.
The analysis of freehold land and buildings and investment property are included
w ithin Note 18 and Note 19 respectively.
125
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
4.Management of risk - continued
4.3 Fair values - continued
The following table presents the changes in Level 3 instruments for the year ended 31
December:

| Group |
|  | 2024
|  | Equity securities
|  | €'000
| Opening balance | 94,839
| Additions | 5,300
| Disposals | (1,749)
| Total gains recognised in profit or loss | 3,090
| Closing balance | 101,480
|  | 2025
|  | Equity securities
|  | €'000
| Opening balance | 101,480
| Additions | 1,682
| Disposals | —
| Total losses recognised in profit or loss | (1,843)
| Closing balance | 101,319

At 31 December 2025 and 2024, the carrying amount of the Group’s and Company’s
other financial assets and liabilities approximated their fair values with the exception of
financial liabilities emanating from investment contracts with DPF. It is impracticable
to determine the fair value of these contracts due to the lack of a reliable basis to
measure the future discretionary return that is a material feature of these contracts.
126
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
5.Capital management
The Group’s policy is to maintain a strong capital base to support its business growth
plans and comply with all regulatory requirements on an ongoing basis whilst assessing
the impact of shareholder returns on its capital employed and safeguarding the Group's
and individual companies ability to continue as a going concern. The Group defines
capital as shareholders’ equity.
The Group’s objectives when managing capital are to:
• comply with the obligations to hold Eligible Own Funds to cover the Solvency
Capital Requirement and Minimum Capital Requirement in terms of the Insurance
Business Act, 1998, (Chapter 403, Laws of Malta) and the applicable Insurance
Rules issued under the Insurance Business Act (‘Insurance Rules’) by the Malta
Financial Services Authority (‘MFSA’);
• provide for the capital requirements of the companies within the Group;
• safeguard the Group’s and individual component companies’ ability to continue as a
going concern and provide returns for shareholders and benefits for other
stakeholders; and
• to provide an adequate return to shareholders by pricing insurance contracts
commensurate with the level of risk.
The individual insurance Group companies are required to hold regulatory capital for
their non-life and life assurance business in compliance with the Insurance Rules issued
by the MFSA. The minimum capital requirements must be maintained at all times
throughout the period. The individual Group companies monitor the level of their own
funds on a regular basis. Any transactions that may potentially affect the individual
company’s own funds and solvency position are immediately reported to their
respective directors and shareholders for resolution.
The Company’s Minimum Capital Requirement Absolute Floor stands at €8,000,000 as
per paragraph 5.6.4 of Chapter 5 (‘Valuation of assets and liabilities, technical
provisions, own funds, Solvency Capital Requirement, Minimum Capital Requirement
and investment rules’) of Part B of the Insurance Rules.
Based on management calculations to date, the Company is sufficiently capitalised and
was compliant at all times with the regulatory capital requirements as stipulated by the
MFSA which are in line with the Solvency II requirements. All other companies within
the Group were also compliant with the respective minimum regulatory requirements
throughout the financial period as per management calculations to date.
127
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
6. Amounts determined on transition to IFRS 17
Transition approach
At 1 January 2022, the Group applied the following approaches to identify and measure
certain groups of contracts on transition to IFRS 17.

| Year of issue of contracts | Transition approach
| After 2016 – term business including reinsurance | Full retrospective approach
| Before 2016 – term business including reinsurance | Fair value approach
| All with-profits and unit-linked business | Fair value approach

The transition approach was determined at the level of a group of insurance contracts
and affected the approach to calculating the CSM on initial adoption of IFRS 17.
The Group applied judgement in determining the transition amounts and the pre-
transition FCF and experience were not considered under this approach.
Applying the fair value approach, the Group determined the CSM to be the difference
between the fair value of a group of insurance contracts, measured in accordance with
IFRS 13 ‘Fair Value Measurement’ and its FCF at the transition date.
The fair value of an insurance liability is the price that a market participant would be
willing to pay to assume the obligation and the remaining risks of the in-force contracts
as at the transition date. A present value technique was used to value groups of
contracts.
In estimating the fair value of groups of insurance contracts, the following
considerations were applied:
– only future cash flows within the boundaries of the insurance contracts were
included in the fair value estimation, excluding future renewals and new business
that would be outside the contract boundary of the contracts under IFRS 17;
– assumptions about expected future cash flows and risk allowances, including
operational risk were adjusted for the market participant’s view, as required by
IFRS 13;
– profit margins were included to reflect what a market participant would require
for accepting obligations under insurance contracts, beyond the risk adjustment
for non-financial risk; and
– diversification between market risk and life risk. Although market risk is
considered as a hedgeable risk, it was assumed that a buyer will be able to capture
this diversification from its other own modules.
128
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
6. Amounts determined on transition to IFRS 17 - continued
Analysis by transition approach - insurance revenue and contractual service margin
For insurance contracts issued by the Group and reinsurance contracts held, an analysis
of insurance revenue for insurance contracts issued and the CSM by transition method
is included in the following tables.

| 31 December 2025 | Life Risk | Investment contracts with DPF | Total
|  | €'000 | €'000 | €'000
| Insurance contracts issued |  |  |
| Insurance revenue |  |  |
| New contracts and contracts measured under the full retrospective approach at transition | (11,832) | (5,302) | (17,134)
| Contracts measured under the fair value approach at transition | (64) | (28,788) | (28,852)
|  | (11,896) | (34,090) | (45,986)
| CSM |  |  |
| New contracts and contracts measured under the full retrospective approach at transition | 32,946 | 17,191 | 50,137
| Contracts measured under the fair value approach at transition | 6,592 | 64,072 | 70,664
|  | 39,538 | 81,263 | 120,801

| 31 December 2025 |  | Life Risk
|  |  | €’000
| Reinsurance contracts held |  |
| CSM |  |
| New contracts and contracts measured under the full retrospective approach at transition |  | (11,472)
| Contracts measured under the fair value approach at transition |  | (4,184)
|  |  | (15,656)

129
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
6. Amounts determined on transition to IFRS 17 - continued
Analysis by transition approach - insurance revenue and contractual service margin -
continued

| 31 December 2024 | Life Risk | Investment contracts with DPF | Total
|  | €'000 | €'000 | €’000
| Insurance revenue |  |  |
| New contracts and contracts measured under the full retrospective approach at transition | (13,182) | (4,116) | (17,298)
| Contracts measured under the fair value approach at transition | (128) | (29,344) | (29,472)
|  | (13,310) | (33,460) | (46,770)
| CSM |  |  |
| New contracts and contracts measured under the full retrospective approach at transition | 27,337 | 12,012 | 39,349
| Contracts measured under the fair value approach at transition | 6,214 | 65,596 | 71,810
|  | 33,551 | 77,608 | 111,159

| 31 December 2024 | Life Risk
|  | €’000
| Reinsurance contracts held |
| CSM |
| New contracts and contracts measured under the full retrospective approach at transition | (9,957)
| Contracts measured under the fair value approach at transition | (4,067)
|  | (14,024)

130
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
6. Amounts determined on transition to IFRS 17 - continued
Expected recognition of the contractual service margin
An analysis of the expected recognition of the CSM remaining at the end of the
reporting period in profit or loss is provided in the following table:

| As at 31 December 2025 | Insurance contracts issued | Reinsurance contracts held
|  | Life Risk | Investment contracts with DPF | Total CSM for insurance contracts issued | Life Risk | Total CSM for reinsurance contracts held
|  | €’000 | €’000 | €’000 | €’000 | €’000
| 1 | (4,208) | (7,978) | (12,186) | 1,752 | 1,752
| 2 | (3,899) | (7,314) | (11,213) | 1,613 | 1,613
| 3 | (3,604) | (6,786) | (10,390) | 1,482 | 1,482
| 4 | (3,327) | (6,144) | (9,471) | 1,361 | 1,361
| 5 | (3,068) | (5,385) | (8,453) | 1,250 | 1,250
| 6 – 10 | (11,942) | (17,624) | (29,566) | 4,813 | 4,813
| > 10 | (16,736) | (30,032) | (46,768) | 6,438 | 6,438
| Total | (46,784) | (81,263) | (128,047) | 18,709 | 18,709

| As at 31 December 2024 | Insurance contracts issued | Reinsurance contracts held
|  | Life Risk | Investment contracts with DPF | Total CSM for insurance contracts issued | Life Risk | Total CSM for reinsurance contracts held
|  | €’000 | €’000 | €’000 | €’000 | €’000
| 1 | (3,576) | (7,025) | (10,601) | 1,555 | 1,555
| 2 | (3,313) | (6,454) | (9,767) | 1,433 | 1,433
| 3 | (3,054) | (5,904) | (8,958) | 1,313 | 1,313
| 4 | (2,811) | (5,466) | (8,277) | 1,202 | 1,202
| 5 | (2,586) | (4,943) | (7,529) | 1,100 | 1,100
| 6 – 10 | (10,071) | (16,401) | (26,472) | 4,226 | 4,226
| > 10 | (14,637) | (31,415) | (46,052) | 5,753 | 5,753
| Total | (40,048) | (77,608) | (117,656) | 16,582 | 16,582

131
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
7.Segment information
Management has determined the operating segments based on the reports reviewed by
the Executive Management team that are used to make strategic decisions.
The segment results for the years ended 31 December 2025 and 2024 are indicated
below.
(i) Insurance revenue and insurance service result
Short-term insurance contracts under PAA
Group and Company

| 31 December 2025 | Motor | Fire and other property damages | Health | Other classes | Group Life | Total
|  | €’000 | €’000 | €’000 | €’000 | €’000 | €’000
| Insurance revenue | 49,246 | 19,972 | 21,472 | 16,447 | 2,556 | 109,693
| Insurance service expenses | (39,783) | (11,333) | (19,083) | (11,240) | (2,036) | (83,475)
| Net expenses from reinsurance contracts held | (1,240) | (7,240) | (49) | (1,139) | (169) | (9,837)
| Insurance service result | 8,223 | 1,399 | 2,340 | 4,068 | 351 | 16,381
| 31 December 2024 | Motor | Fire and other property damages | Health | Other classes | Life | Total
|  | €’000 | €’000 | €’000 | €’000 | €’000 | €’000
| Insurance revenue | 47,166 | 18,531 | 17,037 | 15,220 | 1,968 | 99,922
| Insurance service expenses | (38,405) | (10,918) | (15,198) | (12,628) | (1,347) | (78,496)
| Net expenses from reinsurance contracts held | (1,467) | (6,441) | (96) | (1,002) | (90) | (9,096)
| Insurance service result | 7,294 | 1,172 | 1,743 | 1,590 | 531 | 12,330

132
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
7.Segment information - continued
(i) Insurance revenue and insurance service result - continued
Long-term and linked long-term business
In the opinion of the directors, the subsidiary MAPFRE MSV Life p.l.c. primarily
operates in a single business segment being that of long-term and linked long-term
insurance business.
An analysis of insurance revenue, insurance service expenses and net expenses from
reinsurance contracts held by contract type for 2025 and 2024 is included in the
following tables.

2025 | Life Risk | Investment contracts with DPF | Total
| €’000 | €’000 | €’000
Insurance revenue |  |  |
Contracts not measured under PAA |  |  |
Amounts relating to change in the LRC |  |  |
- Expected incurred claims and other directly attributable expenses | 6,058 | 18,523 | 24,581
- Changes in risk adjustment for non-financial risk for the risk expired | 1,626 | 232 | 1,858
- CSM recognised for the services provided | 4,315 | 8,049 | 12,364
- Experience adjustments – arising from premiums received in the period other than those that relate to future service | (321) | 18 | (303)
Insurance acquisition cash flows recovery | 217 | 7,268 | 7,485
| 11,895 | 34,090 | 45,985
Insurance service expenses |  |  |
Incurred claims and other directly attributable expenses | (4,478) | (18,689) | (23,167)
Changes that relate to past service – changes in the FCF relating to the LIC | 4 | — | 4
Insurance acquisition cash flows amortization | (217) | (7,268) | (7,485)
| (4,691) | (25,957) | (30,648)
Net income (expenses) from reinsurance contracts held |  |  |
Amounts relating to the changes in the remaining coverage |  |  |
- Expected incurred claims and other directly attributable expenses recovery | (1,755) | — | (1,755)
- Change in the risk adjustment for non-financial risk for the risk expired | (322) | — | (322)
- CSM recognised for the services provided | (1,860) | — | (1,860)
- Experience adjustments – arising from ceded premiums paid in the period other than those that relate to future service | (85) | — | (85)
Reinsurance expenses | (4,022) | — | (4,022)
Other incurred directly attributable expenses | (569) | — | (569)
Incurred claims recovery | 1,342 | — | 1,342
| (3,249) | — | (3,249)
Total insurance service result | 3,955 | 8,133 | 12,088

133
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
7.Segment information - continued
(i) Insurance revenue and insurance service result - continued
Long-term and linked long-term business - continued

| 2024 | Life Risk | Investment contracts with DPF | Total
|  | €’000 | €’000 | €’000
| Insurance revenue |  |  |
| Amounts relating to change in the LRC |  |  |
| - Expected incurred claims and other directly attributable expenses | 7,789 | 21,733 | 29,522
| - Changes in risk adjustment for non-financial risk for the risk expired | 1,596 | 228 | 1,824
| - CSM recognised for the services provided | 3,664 | 7,128 | 10,792
| - Experience adjustments – arising from premiums received in the period other than those that relate to future service | 170 | 33 | 203
| Insurance acquisition cash flows recovery | 91 | 4,338 | 4,429
|  | 13,310 | 33,460 | 46,770
| Insurance service expenses |  |  |
| Incurred claims and other directly attributable expenses | (7,259) | (21,845) | (29,104)
| Insurance acquisition cash flows amortization | (91) | (4,338) | (4,429)
|  | (7,350) | (26,183) | (33,533)
| Net expenses from reinsurance contracts held |  |  |
| Amounts relating to the changes in the remaining coverage |  |  |
| - Expected incurred claims and other directly attributable expenses recovery | (2,006) | — | (2,006)
| - Change in the risk adjustment for non-financial risk for the risk expired | (283) | — | (283)
| - CSM recognised for the services provided | (1,651) | — | (1,651)
| - Experience adjustments – arising from ceded premiums paid in the period other than those that relate to future service | (143) | — | (143)
| Reinsurance expenses | (4,083) | — | (4,083)
| Other incurred directly attributable expenses | (519) | — | (519)
| Incurred claims recovery | 1,858 | — | 1,858
|  | (2,744) | — | (2,744)
| Total insurance service result | 3,216 | 7,277 | 10,493

100% ( 2024: 100%) of consolidated insurance revenue emanate from contracts
concluded in or from Malta. All premiums emanate from external customers and there
is no business transacted between segments other than as disclosed i n Note 34.
134
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
8.Investment return
An analysis of net investment return and net financial result by product line is presented below:

| Group | Company
31 December 2025 | Life Risk | Investment contracts with DPF | Invest- ment contracts without DPF | Short- Term contracts measured under the PAA | Other | Total | Short- Term contracts measured under the PAA
| €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000
Net investment income/(expenses) |  |  |  |  |  |  |
Share of profit of other associated undertaking, net of tax | — | — | — | — | 91 | 91 | —
Dividend income from group companies | — | — | — | — | — | — | 3,415
Interest revenue from financial assets not measured at FVTPL | — | 859 | — | 526 | 3,227 | 4,612 | 526
Interest expenses from financial assets not measured at FVTPL | — | — | — | (26) | — | (26) | (26)
Loss on derecognition of subsidiary undertaking | — | — | — | (28) | — | (28) | (28)
Net gains on FVTPL instruments | 204 | 80,152 | 7,052 | 565 | 976 | 88,949 | 565
Net losses on FVOCI instruments | — | — | — | (60) | — | (60) | (60)
Other investment income | — | 461 | — | 1 | — | 462 | 1
Net losses from fair value adjustments to investment properties | — | (652) | — | (251) | — | (903) | (251)
Investment income from investment properties | — | 6,026 | — | 787 | — | 6,813 | 787
Expenses arising from investment properties | — | (420) | — | (21) | — | (441) | (21)
Other investment expenses | — | (5,907) | — | (41) | (20) | (5,968) | (41)
Net credit impairment (losses)/gains | — | (9) | — | 5 | 66 | 62 | 5
Interest on lease liabilities | — | — | — | (111) | — | (111) | (111)
Net investment income | 204 | 80,510 | 7,052 | 1,346 | 4,340 | 93,452 | 4,761
Finance income/(expenses) from insurance contracts issued |  |  |  |  |  |  |
Changes in value of underlying assets of contracts measured under VFA | — | (80,510) | — | — | — | (80,510) | —
Interest accreted | 809 | — | — | — | — | 809 | —
Effect of changes in interest rates and other financial assumptions | (2,267) | — | — | (364) | — | (2,631) | (364)
Effect of changes in FCF at current rates when CSM is unlocked at locked-in rates | (134) | — | — | — | — | (134) | —
Finance expense from insurance contracts issued | (1,592) | (80,510) | — | (364) | — | (82,466) | (364)
Finance income/(expenses) from reinsurance contracts held |  |  |  |  |  |  |
Interest accreted | (498) | — | — | — | — | (498) | —
Effect of changes in interest rates and other financial assumptions | 2,506 | — | — | 94 | — | 2,600 | 94
Effect of changes in FCF at current rates when CSM is unlocked at locked-in rates | 55 | — | — | — | — | 55 | —
Finance income from reinsurance contracts held | 2,063 | — | — | 94 | — | 2,157 | 94
Net change in investment contract liabilities | — | — | (7,052) | — | — | (7,052) | —
Net investment return and net financial result | 675 | — | — | 1,076 | 4,340 | 6,091 | 4,491

135
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
8. Investment return - continued

|  | Group | Company
| 31 December 2024 | Life Risk | Investment contracts with DPF | Investment contracts without DPF | Short-Term contracts measured under the PAA | Other | Total | Short-Term contracts measured under the PAA
|  | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000
| Net investment income/(expenses) |  |  |  |  |  |  |
| Share of profit of other associated undertaking, net of tax | — | — | — | — | 105 | 105 | —
| Dividend income from group companies | — | — | — | — | — | — | 1,323
| Interest revenue from financial assets not measured at FVTPL | — | 1,153 | — | 355 | 3,932 | 5,440 | 355
| Interest expenses from financial assets not measured at FVTPL | — | — | — | (27) | — | (27) | (27)
| Net gains on FVTPL instruments | 625 | 83,210 | 13,131 | 445 | 1,179 | 98,590 | 445
| Other investment income | — | 322 | — | 2 | — | 324 | 2
| Net (losses)/gains from fair value adjustments to investment properties and revaluation of property for own use | — | (533) | — | (196) | 150 | (579) | (196)
| Investment income from investment properties | — | 5,980 | — | 821 | — | 6,801 | 821
| Expenses arising from investment properties | — | (437) | — | (15) | — | (452) | (15)
| Other investment expenses | — | (6,493) | — | (31) | (20) | (6,544) | (31)
| Net credit impairment gains | — | 8 | — | 1 | — | 9 | 1
| Interest on lease liabilities | — | — | — | (77) | — | (77) | (77)
| Net investment income | 625 | 83,210 | 13,131 | 1,278 | 5,346 | 103,590 | 2,601
| Finance income/(expenses) from insurance contracts issued |  |  |  |  |  |  |
| Changes in value of underlying assets of contracts measured under VFA | — | (83,210) | — | — | — | (83,210) | —
| Interest accreted | 1,577 | — | — | — | — | 1,577 | —
| Effect of changes in interest rates and other financial assumptions | (765) | — | — | (818) | — | (1,583) | (818)
| Effect of changes in FCF at current rates when CSM is unlocked at locked-in rates | 24 | — | — | — | — | 24 | —
| Finance expense from insurance contracts issued | 836 | (83,210) | — | (818) | — | (83,192) | (818)
| Finance income/(expenses) from reinsurance contracts held |  |  |  |  |  |  |
| Interest accreted | (818) | — | — | — | — | (818) | —
| Effect of changes in interest rates and other financial assumptions | 73 | — | — | 182 | — | 255 | 182
| Effect of changes in FCF at current rates when CSM is unlocked at locked-in rates | 48 | — | — | — | — | 48 | —
| Finance (expenses)/income from reinsurance contracts held | (697) | — | — | 182 | — | (515) | 182
| Net change in investment contract liabilities | — | — | (13,131) | — | — | (13,131) | —
| Net investment return and net financial result | 764 | — | — | 642 | 5,346 | 6,752 | 1,965

136
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
9. Other income

|  | Group
|  | 2025 | 2024
|  | €'000 | €'000
| Investment management fees | 1,625 | 786
| Management fees | 4 | 125
| Other income | 78 | 371
|  | 1,707 | 1,282

10.Profit before tax
The profit before tax is stated after charging:

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Employee compensation (Note 11) | 17,741 | 16,579 | 9,890 | 9,238
| Depreciation/amortisation: |  |  |  |
| - intangible assets (Note 16) | 5,490 | 5,080 | 2,048 | 2,226
| - property, plant and equipment (Note 18) | 1,029 | 1,125 | 636 | 626
| Impairment of receivables | 35 | 10 | 35 | 10
| Increase in provision for impairment on receivables (Note 26) | 152 | 182 | 152 | 182

The financial statements include fees, exclusive of VAT, charged by the Company's
auditors for services rendered during the financial years ended 31 December 2025 and
2024, relating to entities that are included in the consolidation amounting to:

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Annual statutory audit | 768 | 911 | 333 | 336
| Solvency II audit | 118 | 118 | 51 | 51
| Paid during the year: |  |  |  |
| for financial year 2025 | 375 | — | 167 | —
| for financial year 2024 | 480 | 413 | 196 | 168
| for financial year 2023 | — | 1,497 | — | 674

137
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
11. Employee compensation

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Salaries | 16,708 | 15,587 | 9,285 | 8,677
| Social security costs | 808 | 790 | 481 | 457
| Contributions to Employee Voluntary Occupational Pension Scheme | 225 | 202 | 124 | 104
|  | 17,741 | 16,579 | 9,890 | 9,238

The average number of persons employed during the year was:

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | No. | No. | No. | No.
| Key management personnel | 26 | 26 | 13 | 14
| Managerial | 41 | 41 | 26 | 25
| Technical | 229 | 229 | 140 | 141
| Administrative | 16 | 18 | 9 | 11
|  | 312 | 314 | 188 | 191

12. Income tax expense

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €'000 | €'000 | €'000 | €'000
| Current tax expense | 8,231 | 6,967 | 5,162 | 3,286
| Deferred tax expense (Note 23) | 873 | (157) | 135 | 126
| Income tax expense | 9,104 | 6,810 | 5,297 | 3,412

138
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
12. Income tax expense - continued
The tax on the Group’s and Company’s profit before tax differs from the theoretical
amount that would arise using the basic tax rate as follows:

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Profit before tax | 29,618 | 24,804 | 16,872 | 10,531
| Tax at 35% | 10,366 | 8,681 | 5,905 | 3,686
| Adjusted for tax effect of : |  |  |  |
| Net exempt income and disallowed expenses | (113) | (826) | (254) | (111)
| Property withholding tax at 8% or10% | (791) | (815) | (6) | 59
| Other | (358) | (230) | (348) | (222)
| Income tax expense | 9,104 | 6,810 | 5,297 | 3,412

13. Directors’ emoluments

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €'000 | €'000 | €'000 | €'000
| Directors' fees | 247 | 250 | 197 | 187

Group Directors’ fees include fees payable to the Company’s directors both from the
Company and from other Group Companies where applicable.
139
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
14.Earnings per share
Earnings per share are based on the net profit for the year divided by the weighted
average number of ordinary shares in issue during the year.

|  | Group
|  | 2025 | 2024
|  | €'000 | €'000
| Profit attributable to owners of the Company | 14,935 | 12,519
| Number of ordinary shares in issue (Note 28) | 92,000 | 92,000
| Basic and diluted earnings per share attributable to owners of the Company (€) | 0.162 | 0.136

15.Dividends
A final gross dividend in respect of year ended 31 December 2025 of €0.091128
( 2024: €0.080268) per share amounting to a total dividend of €8,383,779 (2024 :
€7,384,615) is to be proposed by the directors at the forthcoming annual general
meeting. This is equivalent to a net dividend of €0.065217 (2024: €0.052174) per
share amounting to a total net dividend of €6,000,000 (2024: €4,800,000).
140
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
16.Intangible assets

| Group |  |  |
|  | Computer Software | Deferred Acquisition cost (i) | Total (ii)
|  | €’000 | €’000 | €’000
| At 1 January 2024 |  |  |
| Cost or valuation | 58,330 | 4,425 | 62,755
| Accumulated amortisation and impairment | (28,410) | (3,613) | (32,023)
| Net book amount | 29,920 | 812 | 30,732
| Year ended 31 December 2024 |  |  |
| Opening net book amount | 29,920 | 812 | 30,732
| Additions | 7,448 | 1,311 | 8,759
| Disposals | (2,906) | — | (2,906)
| Amortisation charge | (4,960) | (120) | (5,080)
| Amortisation released upon derecognition | 2,906 | — | 2,906
| Closing net book amount | 32,408 | 2,003 | 34,411
| At 31 December 2024 |  |  |
| Cost or valuation | 62,872 | 5,736 | 68,608
| Accumulated amortisation and impairment | (30,464) | (3,733) | (34,197)
| Net book amount | 32,408 | 2,003 | 34,411
| Year ended 31 December 2025 |  |  |
| Opening net book amount | 32,408 | 2,003 | 34,411
| Additions | 5,916 | 1,931 | 7,847
| Disposal/Derecognition | (4,960) | — | (4,960)
| Amortisation charge | (5,255) | (235) | (5,490)
| Amortisation released on derecognition | 4,960 | — | 4,960
| Closing net book amount | 33,069 | 3,699 | 36,768
| At 31 December 2025 |  |  |
| Cost or valuation | 63,828 | 7,667 | 71,495
| Accumulated amortisation and impairment | (30,759) | (3,968) | (34,727)
| Net book amount | 33,069 | 3,699 | 36,768

(i) This intangible asset relates to investment contracts without DPF only.
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MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
16.Intangible assets - continued

| Company | Computer Software
|  | €’000
| At 1 January 2024 |
| Cost | 23,603
| Accumulated amortisation | (13,212)
| Net book amount | 10,391
| Year ended 31 December 2024 |
| Opening net book amount | 10,391
| Additions | 2,408
| Disposal | (6)
| Amortisation charge | (2,226)
| Amortisation released on disposal | 6
| Closing net book amount | 10,573
| At 31 December 2024 |
| Cost | 26,005
| Accumulated amortisation | (15,432)
| Net book value | 10,573
| Year ended 31 December 2025 |
| Opening net book amount | 10,573
| Additions | 2,555
| Disposal | —
| Amortisation charge | (2,048)
| Amortisation released on disposal | —
| Closing net book amount | 11,080
| At 31 December 2025 |
| Cost | 28,560
| Accumulated amortisation | (17,480)
| Net book amount | 11,080

Computer software mainly represents amounts capitalised relating to the development
of the Group and Company’s IT system by related companies forming part of the
MAPFRE S.A. Group.
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Annual Report - 31 December 2025
17. Leases
Leases as the lessor
The Group and the Company lease out certain property. N ote 1 9 s ets out information
about investment property. The Group has classified these leases as operating leases
because they do not transfer substantially all the risks and rewards incidental to the
ownership of the assets.
The following table sets out a maturity analysis of lease payments receivable, showing
the undiscounted lease payments to be received after the reporting date.
Operating leases

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Less than one year | 5,799 | 5,655 | 770 | 666
| One to two years | 4,115 | 3,068 | 285 | 545
| Two to three years | 3,170 | 2,027 | 122 | 138
| Three to four years | 2,082 | 1,393 | 122 | 4
| Four to five years | 1,625 | 900 | 99 | —
| More than five years | 5,533 | 2,457 | — | —
| Total | 22,324 | 15,500 | 1,398 | 1,353

143
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
18.Property, plant and equipment
Group

|  | Freehold |  |  | Furniture |
|  | land and | Leasehold | Motor | fittings and |
|  | buildings | improvements | Vehicles | equipment | Total
|  | €’000 | €’000 | €’000 | €’000 | €'000
| At 1 January 2024 |  |  |  |  |
| Cost | 14,070 | 4,381 | — | 9,450 | 27,901
| Accumulated depreciation | (357) | (2,620) | — | (7,741) | (10,718)
| Closing net book amount | 13,713 | 1,761 | — | 1,709 | 17,183
| Year ended 31 December 2024 |  |  |  |  |
| Opening net book amount | 13,713 | 1,761 | — | 1,709 | 17,183
| Additions | 72 | 276 | — | 634 | 982
| Disposals | — | (1,153) | — | (922) | (2,075)
| Revaluation gain to profit or loss | 168 | — | — | — | 168
| Depreciation charge | (104) | (319) | — | (702) | (1,125)
| Depreciation release on disposal | — | 1,063 | — | 919 | 1,982
| Closing net book amount | 13,849 | 1,628 | — | 1,638 | 17,115
| At 31 December 2024 |  |  |  |  |
| Cost | 14,310 | 3,504 | — | 9,162 | 26,976
| Accumulated depreciation | (461) | (1,876) | — | (7,524) | (9,861)
| Net book amount | 13,849 | 1,628 | — | 1,638 | 17,115
| Year ended 31 December 2025 |  |  |  |  |
| Opening net book amount | 13,849 | 1,628 | — | 1,638 | 17,115
| Additions | 18 | 116 | 30 | 664 | 828
| Disposals | — | (35) | — | (112) | (147)
| Amounts transferred to investment property | (998) | — | — | — | (998)
| Revaluation gain to other comprehensive income | 196 | — | — | — | 196
| Depreciation charge | (102) | (266) | (1) | (660) | (1,029)
| Depreciation on amount transferred to investment property (Note 19) | 86 | — | — | — | 86
| Depreciation release on disposal | — | 35 | 0 | 107 | 142
| Closing net book amount | 13,049 | 1,478 | 29 | 1,637 | 16,193
| At 31 December 2025 |  |  |  |  |
| Cost | 13,526 | 3,585 | 30 | 9,714 | 26,855
| Accumulated depreciation | (477) | (2,107) | (1) | (8,077) | (10,662)
| Net book amount | 13,049 | 1,478 | 29 | 1,637 | 16,193

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MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
18.Property, plant and equipment - continued
Company

|  | Freehold |  | Furniture |
|  | land and | Leasehold | fittings and |
|  | buildings | improvements | equipment | Total
|  | €'000 | €'000 | €'000 | €'000
| At 1 January 2024 |  |  |  |
| Cost | 1,734 | 3,793 | 3,922 | 9,449
| Accumulated depreciation | (49) | (2,037) | (3,154) | (5,240)
| Net book amount | 1,685 | 1,756 | 768 | 4,209
| Year ended 31 December 2024 |  |  |  |
| Opening net book amount | 1,685 | 1,756 | 768 | 4,209
| Additions | — | 276 | 299 | 575
| Disposal | — | (603) | (854) | (1,457)
| Depreciation Charge | (17) | (317) | (292) | (626)
| Amortisation released on disposal | — | 512 | 850 | 1,362
| Closing net book amount | 1,668 | 1,624 | 771 | 4,063
| At 31 December 2024 |  |  |  |
| Cost | 1,734 | 3,466 | 3,367 | 8,567
| Accumulated depreciation | (66) | (1,842) | (2,596) | (4,504)
| Net book amount | 1,668 | 1,624 | 771 | 4,063

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MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
18.Property, plant and equipment - continued

| Company - continued |  |  |  |
|  | Freehold |  | Furniture |
|  | land and | Leasehold | fittings and |
|  | buildings | improvements | equipment | Total
|  | €’000 | €’000 | €’000 | €’000
| Year ended 31 December 2025 |  |  |  |
| Opening net book amount | 1,668 | 1,624 | 771 | 4,063
| Additions | — | 116 | 443 | 559
| Amounts transferred to investment property | (317) | — | — | (317)
| Revaluation gain to other comprehensive income | 196 | — | — | 196
| Depreciation charge | (17) | (265) | (354) | (636)
| Depreciation on amount transferred to investment property (Note 19) | 15 | — | — | 15
| Closing net book amount | 1,545 | 1,475 | 860 | 3,880
| At 31 December 2025 |  |  |  |
| Cost or valuation | 1,613 | 3,582 | 3,810 | 9,005
| Accumulated depreciation | (68) | (2,107) | (2,950) | (5,125)
| Net book amount | 1,545 | 1,475 | 860 | 3,880

Freehold land and buildings transferred from investment property are transferred at the
fair value at the point of transfer and are subsequently depreciated. Transfers to
investment property are made at the depreciated value at the point of transfer. If the fair
value of the freehold land and buildings is significantly different as compared to its
carrying amount then a revaluation adjustment is recorded.
Depreciation charge has been included in administrative expenses.
The Group’s and Company’s Land and buildings are shown at fair value (level 3).
A valuation of land and buildings was carried out by external qualified valuers in 2025.
The fair value movements were debited to profit or loss. The carrying amount of land
and buildings that would have been included in the financial statements had these assets
been carried at cost less accumulated depreciation for the Group is €13.70 million
(2024: €13.70 million) and for the Company €0.8 million (2024: €0.8 million).
146
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Annual Report - 31 December 2025
18. Property, plant and equipment - continued
Valuation processes
Periodically, the Group engages qualified valuers to determine the fair value of the
Group’s land and buildings. The Company's land and buildings were revalued by P wC
Malta in 2025 with the gain debited to other comprehensive income. The fair value of
the land and buildings of the subsidiary was last determined by PwC Malta in 2024.
Whenever a valuation is carried out the finance department:
• verifies all major inputs to the valuation report prepared by the qualified valuer;
• assesses property valuation movements when compared to the prior valuation
report; and
• holds discussions with the qualified valuer.
Valuation techniques
The fair value of the Group’s and the Company’s land and buildings, with a total
carrying amount of €13.0 million and €1.5 million respectively (2024: €13.9 million
and €1.7 million respectively), was determined by capitalizing future net income
streams based on significant unobservable inputs. These inputs include:

Valuation technique | Significant unobservable inputs | Inter-relationship between key unobservable inputs and fair value measurement
Discounted cash flows: The valuation model considers the present value of net cash flows potentially generated from the property, taking into account the expected rental growth rate, void periods and costs not paid for by the tenants. The expected net cash flows are discounted using the risk- adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its location (prime vs secondary), lease terms, property risk premium and inflation. | – Risk-adjusted discount rate varying between 6.2% and 7% (2024: 6.2% and 6.6%) – The valuation provides for a void factor varying between 2.5% and 7.0% (2024: 2.5% and 5.5%) on rental income. – A benchmark lease market rate was applied once current lease terms expired. – Expected market rental growth rate of 2.0% (2024: 2.0%) in line with the implied inflation rate IRR (Internal Rate of Return). | The estimated fair value would increase/(decrease) if: – The risk-adjusted discount rate were lower/(higher); – Void factor were lower/(higher) – The market rate were higher/(lower); – Expected market rental growth were higher/ (lower).

147
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
18. Property, plant and equipment - continued
Valuation techniques - continued
Although the properties are currently being used by MMS as its Floriana Regional
Office and MMSV as its head office, for the purpose of the valuation, it was assumed
that the property’s highest and best use would be rental to a third party, assuming same
use. Although the Market Approach was considered, its applicability is limited, due to
the illiquidity of the commercial property market in Malta and therefore, the limited
number of transactions available. Moreover, it is inherently difficult to find
transactions including office blocks that are directly comparable to the property.
19. Investment property

| Group | Company
| €’000 | €’000
At 1 January 2024 |  |
Cost | 68,026 | 7,885
Accumulated fair value gains | 37,593 | 5,924
Net book amount | 105,619 | 13,809
Year ended 31 December 2024 |  |
Opening net book amount | 105,619 | 13,809
Additions | 934 | 100
Net fair value losses | (746) | (196)
Disposals | (1) | (1)
Net book amount | 105,806 | 13,712
At 31 December 2024 |  |
Cost | 68,959 | 7,984
Accumulated fair value gains | 36,847 | 5,728
Net book amount | 105,806 | 13,712

148
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
19. Investment property - continued

|  | Group | Company
|  | €’000 | €’000
| Year ended 31 December 2025 |  |
| Opening net book amount | 105,806 | 13,712
| Transfer from Property plant & equipment at amortised value | 1,172 | 302
| Additions | 1,367 | 73
| Net fair value losses | (903) | (251)
| Disposals | (317) | (317)
| Net book amount | 107,125 | 13,519
| At 31 December 2025 |  |
| Cost | 71,181 | 8,042
| Accumulated fair value gains | 35,944 | 5,477
| Net book amount | 107,125 | 13,519

Transfers to or from property, plant & equipment and disposals are inclusive of
accumulated fair value gains at the point of transfer.
Fair value of investment property
A valuation of the Group’s and Company’s investment property was performed by
external qualified valuers to determine the fair value of the land and buildings as at 31
December 2025 and 2024. The fair value movements were credited to profit or loss and
are presented within ‘investment return’ (Note 8).
The Group’s and the Company’s investment property, comprising mainly office
buildings, have been determined to fall within level 3 of the fair valuation hierarchy.
The different levels in the fair value hierarchy have been defined in Note 4.3.
The Group’s and the Company’s policy is to recognise transfers into and out of fair
value hierarchy levels as of the date of the event or change in circumstances that caused
the transfer. There were no transfers between levels during the year.
Valuation processes
On an annual basis, the Group and Company engage external, independent property
valuers, having appropriate recognised professional qualifications and recent
experience in the location and category of the properties being valued to determine the
fair value of the land and buildings. As at 31 December 2025 and 2024, the fair values
of the land and buildings have been determined by PwC Malta and DHI Periti.
149
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
19. Investment property - continued
Valuation processes - continued
At each financial year end the investments department:
• verifies all major inputs to the valuation report prepared by the qualified valuer;
• assesses property valuation movements when compared to the prior year valuation
report; and
• holds discussions with the qualified valuer.
The valuation techniques used for investment properties were the discounted cash flow
valuation, market approach, comparative transaction method and income capitalisation
method to provide accuracy and consistency in arriving at a fair value that reflects a
price that would be reasonably expected to be received in an orderly transaction
between market participants at the measurement date.
Valuation technique - Discounted cash flow
The following tables shows the valuation technique used in measuring the fair value of
investment property using the discounted cash flow technique, as well as the significant
unobservable inputs used. These inputs include:
Group
150
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025

| Valuation technique | Significant unobservable inputs | Inter-relationship between key unobservable inputs and fair value measurement
| Discounted cash flows: The valuation model considers the present value of net cash flows generated from the property, taking into account the expected rental growth rate, void periods and costs not paid for by the tenants. The expected net cash flows are discounted using the risk-adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its location (prime vs secondary), lease terms, property risk premium and inflation. | – Risk-adjusted discount rate varying between 6.3% and 8.5% (2024: 6.3% and 8.3%). – A void factor varying between 1.0% to 7% (2024: 1.0% and 5.5%) on rental income. – Lease market rate was applied once current lease terms expired. – Expected market rental growth rate of 2.0% (2024: 2.0%) in line with the general inflation rate – Construction costs for undeveloped airspace and re-devel opable land varying between €676/sqm and €1,658/sqm (2024: €673/ sqm and €1,621/sqm) | The estimated fair value would increase/(decrease) if: – The risk-adjusted discount rate were lower/ (higher); – Void factor were lower/ (higher); – The market rate were higher/(lower); – Expected market rental growth were higher/ (lower). – Constructions costs were lower/(higher).

151
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
19. Investment property - continued
Valuation technique - Discounted cash flow - continued
Company

| Valuation technique | Significant unobservable inputs | Inter-relationship between key unobservable inputs and fair value measurement
| Discounted cash flows: The valuation model considers the present value of net cash flows generated from the property, taking into account the expected rental growth rate, void periods and costs not paid for by the tenants. The expected net cash flows are discounted using the risk-adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its location (prime vs secondary), lease terms, property risk premium and inflation. | – Risk-adjusted discount rate varying between 7% and 7.9% (2024: 6.6% and 7.6%). – A void factor of 7.0% (2024: 5.5%) on rental income. – Lease market rate was applied once current lease terms expired. – Expected market rental growth rate of 2.0% (2024: 2.0%) in line with general inflation rate. | The estimated fair value would increase/(decrease) if: – The risk-adjusted discount rate were lower/ (higher); – Void factor were lower/ (higher); – The market rate were higher/(lower); – Expected market rental growth were higher/ (lower).

The fair value of investment property determined by external, qualified property
valuers on the basis of the discounted cash flow method amounted to €103.0 million
(2024: €101.8 million) for the Group and €12.9 million (2024: €12.8 million) for the
Company.
A transfer was made from Investment Property in 2025 whilst no transfer were made to
or from Investment Property during 2024.
Valuation technique – Market approach
One property held by the Group situated within the Grand Harbour Local Plan has been
valued using the Market Approach.
T he property is valued with reference to parameters for comparable properties in terms
of either actual prices from recent transactions or advertised prices for properties
currently available for sale. Through the Market Approach, the property is valued in its
existing state.
152
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
19. Investment property - continued
Valuation technique – Market approach - continued
Market Value Technique

Valuation technique | Significant unobservable inputs | Inter-relationship between key unobservable inputs and fair value measurement
Market value : The valuation model comprises: The estimation of an average sales rate based on information obtained from either actual prices of recent transactions or advertised prices for properties currently available for sale. | – Average sales rate of €1,112/sqm (2024: €1,105/sqm) – Reduction in average sales rate of 60% (2024: 70%) to allow for potential negotiation in rates between what is being advertised to what is actually contracted. | The estimated fair value would increase/(decrease) if: – The average sale rate were higher/ (lower); – The reduction in average sales rate were higher/(lower);

The fair value of investment property determined by external, qualified property
valuers on the basis of market approach method amounted to €2.3 million for the Group
in 2025 (2024: €2.3 million).
Valuation technique - Comparative transactions method
The fair value of the Group’s investment properties determined on the basis of the
market comparison method amounted to €1.2 million in 2025 (2024: €0.7 million). The
comparative method is based on an expected sales value per square metre based on an
average/ median of values derived from observable market transactions for comparable
properties.
Valuation technique - Income Capitalisation Method
The valuation for all other investment property with a total carrying amount of €0.6
million (2024: €0.9 million) for the Group and Company, was determined by
capitalising future net income streams based on significant unobservable inputs. These
inputs include:

| Future rental cash inflows | based on the actual location, type and quality of the properties and supported by the terms of any existing lease, other contracts or external evidence such as current market rents for similar properties;
| Capitalisation rates | based on actual location, size and quality of the properties and taking into account market data at the valuation date.

153
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
19. Investment property - continued
Valuation technique - Income Capitalisation Method - continued
Information about fair value measurements using significant unobservable inputs (level
3)
Group & Company

|  |  |  | Significant unobservable Inputs
|  | Fair value at 31 December 2025 | Valuation technique | Rental value | Capitalisation rate
| Description | € |  | € | %
| Office buildings | 0.63m | Capitalisation of future net income streams | 0.05m | 3.50-5.00

Group & Company

|  |  |  | Significant unobservable Inputs
| Description | Fair value at 31 December 2024 | Valuation technique | Rental value | Capitalisation rate
|  | € |  | € | %
| Office buildings | 0.94m | Capitalisation of future net income streams | 0.04m | 5.00

For each valuation for which rental value and capitalisation rate have been determined
to be the significant unobservable inputs, the higher the rental value and the lower the
capitalisation rate, the higher the fair value. Conversely, the lower the rental value and
the higher the capitalisation rate, the lower the fair value.
In the absence of future rental cash inflows, fair value is based on active market prices,
adjusted, if necessary for any difference in the nature, location or condition of the
specific asset.
154
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
19. Investment property - continued
Sensitivity analysis
Sensitivity analysis was carried out to assess the impact of changing the risk-adjusted
discount rate (0.5 percentage point increase/decrease), or the market rental rate growth
(5.0 percentage point increase/decrease) in the case of the discounted cash flow, and
market approach (5.0 percentage point increase/decrease), and the capitalisation rate for
the income capitalisation method. The tables below show the changes in the valuation
arising from such changes:
Group

| 2025 | 2025 | 2024 | 2024
| -0.5% | +0.5% | -0.5% | +0.5%
| € million | € million | € million | € million
Discount rates | 7.9 | (8.2) | 8.4 | (8.7)
| 2025 | 2025 | 2024 | 2024
| -5% | +5% | -5% | +5%
| € million | € million | € million | € million
Market rates | (5.3) | 5.4 | (5.7) | 5.5

Company

| 2025 | 2025 | 2024 | 2024
| -0.5% | +0.5% | -0.5% | +0.5%
| € million | € million | € million | € million
Discount rates | 1.0 | (0.9) | 1.0 | (1.0)
| 2025 | 2025 | 2024 | 2024
| -5% | +5% | -5% | +5%
| € million | € million | € million | € million
Market rates | (0.6) | 0.6 | (0.7) | 0.5

The impact on profit or loss would be a maximum increase of €7.9 million (2024: €8.4
million) or a maximum decrease of €8.2 million (2024: €8.7 million) for the Group and
a maximum increase of €1.0 million (2024: €1.0 million) or a maximum decrease of
€0.9 million (2024: €1.0 million) for the Company.
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MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
20.Investment in subsidiary undertakings

|  | Company
|  | €’000
| Year ended 31 December 2024 |
| Opening net book amount | 77,214
| Closing net book amount | 77,214
| Year ended 31 December 2025 |
| Opening net book amount | 77,214
| Disposal | (1,095)
| Closing net book amount | 76,119

The subsidiary undertakings at 31 December are shown below:

| Subsidiary undertakings | Registered office | Class of shares held | Percentage of shares held
|  |  |  | 2025 | 2024
| Euro Globe Holdings Limited (Struck off effective 06.03.2025) | Middle Sea House Floriana FRN1442 Malta | Ordinary shares | —% | 100%
| Euromed Risk Solutions Limited (Company in liquidation) | 4th Floor Development House St. Anne Str Floriana FRN9010 Malta | Ordinary shares | 100% | 100%
| Bee Insurance Management Limited | Middle Sea House Floriana FRN1442 Malta | Ordinary shares | 100% | 100%
| MAPFRE MSV Life plc | The Mall Triq il-Mall Floriana FRN1470 Malta | Ordinary shares | 50% | 50%
| Church Wharf Properties Limited | Middle Sea House Floriana FRN1442 Malta | Ordinary shares | 75% | 75%

156
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
20.Investment in subsidiary undertakings - continued
The Group’s aggregated assets and liabilities and the results of its subsidiary
undertakings that have non-controlling interest, before elimination entries, are as
follows:

| 2025 | % Held by non- controlling interests | Assets | Liabilities | Revenues | Profit before tax | Net cash
|  |  | €’000 | €’000 | €’000 | €’000 | €’000
| MAPFRE MSV Life p.l.c. | 50% | 2,383,956 | 2,201,467 | 209,892 | 15,669 | (32,569)
| Church Wharf Properties Limited | 25% | 2,300 | 406 | — | (38) | —

| 2024 | % Held by non- controlling interests | Assets | Liabilities | Revenues | Profit before tax | Net cash
|  |  | €’000 | €’000 | €’000 | €’000 | €’000
| MAPFRE MSV Life p.l.c. | 50% | 2,357,236 | 2,182,904 | 205,847 | 14,983 | 31,053
| Church Wharf Properties Limited | 25% | 2,301 | 368 | — | (43) | —

The amount of dividends that can be distributed in cash by MAPFRE MSV Life p.l.c. is
restricted by the solvency requirements imposed by the MFSA Regulations.
During 2011, the Company acquired control of MAPFRE MSV Life p.l.c. following a
shareholders’ agreement. MAPFRE MSV Life p.l.c. had previously been accounted for
as an associated undertaking.
As a result of this business combination, Church Wharf Properties Limited, which was
previously classified as an associated undertaking, also became a subsidiary in view of
the fact that the remaining interest in this company is held by MAPFRE MSV Life
p.l.c.
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MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
21. Investment in associated undertakings

|  | Group | Company
|  | €’000 | €’000
| At 1 January 2024 |  |
| Cost | 14,480 | 294
| Accumulated share of associated undertaking's equity | 109 | 109
| Accumulated fair value movements | 9,334 | —
| Net book amount | 23,923 | 403
| 2024 |  |
| Opening net book amount | 23,923 | 403
| Disposals | (17,900) | —
| Share of associated undertaking's movement in equity | (4) | (4)
| Fair value movement | (793) | —
| Closing net book amount | 5,226 | 399
| At 31 December 2024 |  |
| Cost | 4,480 | 294
| Accumulated share of associated undertaking's equity | 105 | 105
| Accumulated fair value movements | 641 | —
| Net book amount | 5,226 | 399

| Year ended 31 December 2025 |  |
| Opening net book amount | 5,226 | 399
| Share of associated undertaking's movement in equity | (11) | —
| Disposal | (4,806) | —
| Fair value movement | (21) | (11)
| Closing net book amount | 388 | 388
| At 31 December 2025 |  |
| Cost | 294 | 294
| Accumulated share of associated undertaking's equity | 94 | 105
| Accumulated fair value movements | — | (11)
| Net book amount | 388 | 388

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MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
21 . Investment in associated undertakings - continued
The Group’s aggregated assets and liabilities and the share of the results of its
associated undertaking, which is unlisted is as follows:

| 2025 | Registered office | Assets | Liabilities | Revenues | Profit | % of interest held
|  |  | €’000 | €’000 | €’000 | €’000 |
| Middlesea Assist Limited | 4th Floor, Development House, St. Anne Street, Floriana FRN 9010 Malta | 958 | 66 | 2,936 | 294 | 49%

| 2024 | Registered office | Assets | Liabilities | Revenues | Profit | % of interest held
|  |  | €’000 | €’000 | €’000 | €’000 |
| Middlesea Assist Limited | 4th Floor, Development House, St. Anne Street, Floriana FRN 9010 Malta | 1,507 | 520 | 3,208 | 309 | 49%

In addition to the associated undertakings above, MAPFRE MSV Life p.l.c. also held
the following investments in associated undertakings:

| Associated undertakings | Registered office | Class of shares held | Percentage of shares held
|  |  |  | MSV | Group
|  |  |  | 2025 | 2024 | 2025 | 2024
| Plaza Centres p.l.c. | The Plaza Commercial Centre |  |  |  |  |
|  | Bisazza Street Sliema | Ordinary shares | 0.00% | 31.42% | 0.00% | 31.42%

Plaza Centres p.l.c. is listed on the Malta Stock Exchange and its share price as at 31
December 2025 was €0.90 (31 December 2024: €0.60 ).
159
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
22. Other investments
The investments are summarised by measurement category in the table below.

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Fair value through profit or loss | 2,099,618 | 2,054,670 | 3,119 | 2,813
| Fair value through OCI | 22,069 | 16,273 | 22,069 | 16,273
| Amortised Cost | 109,020 | 88,617 | — | —
|  | 2,230,707 | 2,159,560 | 25,188 | 19,086

(a) Investments at fair value through profit or loss
Analysed by type of investment as follows:

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Equity securities, and units in unit trusts | 888,906 | 878,325 | 3,119 | 2,813
| Debt securities | 941,256 | 955,212 | — | —
| Assets held to cover linked liabilities |  |  |  |
| - collective investment schemes | 267,247 | 221,133 | — | —
| Forward foreign exchange contracts | 2,209 | — | — | —
| Total investments at fair value through profit or loss | 2,099,618 | 2,054,670 | 3,119 | 2,813

At 31 December 2025, the Group had €30.3 million financial commitments in respect
of uncalled capital (2024: €31.9 million).
Equity securities and collective investment schemes are considered to be substantially
non-current assets in nature.
160
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
22. Other investments - continued
(a) Investments at fair value through profit or loss - continued
The movements for the year are summarised as follows:

|  | Group | Company
|  | Fair value through profit & loss | Fair value through profit & loss
|  | €’000 | €’000
| Year ended 31 December 2024 |  |
| Opening net book amount | 1,971,728 | 2,486
| Additions | 1,384,408 | 61
| Disposals | (1,355,184) | —
| Net fair value gains (excluding net realised gains) | 45,299 | 266
| Movement in accrued interest receivable | 1,603 | —
| Closing net book amount | 2,047,854 | 2,813
| Year ended 31 December 2025 |  |
| Opening net book amount | 2,047,854 | 2,813
| Additions | 861,616 | 56
| Disposals | (841,850) | —
| Net fair value gains (excluding net realised gains) | 31,389 | 250
| Movement in accrued interest receivable | (29) | —
| Closing net book amount | 2,098,980 | 3,119

Derivative financial liabilities amounting to €0.6 million (2024 €6.8 million), included
in the table above, are classified within liabilities in the statement of financial position.
The maturity of fixed income debt securities is summarised below:

|  | Group
|  | 2025 | 2024
|  | €'000 | €'000
| Within one year | 42,032 | 19,239
| Between 1 and 2 years | 48,869 | 66,756
| Between 2 and 5 years | 310,217 | 246,539
| Over 5 years | 540,138 | 622,678
| Closing net book amount | 941,256 | 955,212

161
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
22. Other investments - continued
(b)Fair value through OCI

|  | Group and Company
|  | 2025 | 2024
|  | €’000 | €’000
| Listed debt securities | 22,069 | 16,273

The movement for the year is summarised as follows:

| Listed debt securities |  |
|  | Group and Company
|  | 2025 | 2024
|  | €’000 | €’000
| Year ended 31 December |  |
| Opening net book amount | 16,273 | 13,804
| Additions | 14,058 | 6,120
| Disposals | (8,324) | (3,909)
| Net fair value gains | 62 | 258
| Closing net book amount | 22,069 | 16,273

| Group and Company
| 2025 | 2024
| €’000 | €’000
Within one year | 3,394 | 6,347
Between 1 and 2 years | 596 | 4,272
Between 2 and 5 years | 16,415 | 4,312
Over 5 years | 1,664 | 1,342
| 22,069 | 16,273

162
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
22. Other investments - continued
The movement for the year are summarised as follows:

| Rating of fixed income debt securities |  |
|  | Group and Company
|  | 2025 | 2024
|  | €’000 | €’000
| AAA | 3,612 | 4,047
| AA | 5,251 | 2,517
| A | 9,441 | 5,032
| BBB | 3,765 | 4,677
| BB or lower | — | —
|  | 22,069 | 16,273

(c)Amortised cost
Analysed by type of investment as follows:

|  | Group
|  | 2025 | 2024
|  | €’000 | €’000
| Deposits with banks or credit institutions | 59,983 | 39,657
| Debt securities | 49,037 | 48,960
|  | 109,020 | 88,617

163
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
22.Other investments - continued
(c)Amortised cost - continued
Analysed by type of investment as follows:

|  | Group
|  | 2025 | 2024
|  | €’000 | €’000
| The movements for the year are summarised as follows: |  |
| Opening net book amount | 88,617 | 150,781
| Interest income earned | 3,940 | 4,892
| Interest income collected | (4,317) | (5,854)
| Additions | 60,000 | 54,311
| Redemptions and disposals | (39,276) | (115,521)
| ECL | 56 | 8
| Closing net book amount | 109,020 | 88,617

| Maturity of investments at amortised cost: |  |
|  | Group
|  | 2025 | 2024
|  | €’000 | €’000
| Within 3 months | — | —
| Within 1 year but exceeding 3 months | — | —
| Between 1 and 5 years | 100,852 | 80,442
| Over 5 years | 8,168 | 8,175
|  | 109,020 | 88,617

| The above investments earn interest as follows: | Group
|  | 2025 | 2024
|  | €’000 | €’000
| At fixed rates | 109,020 | 88,617

164
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
23. Deferred income tax

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Balance at 1 January | 11,808 | 11,961 | 1,317 | 1,187
| Movements during the year: |  |  |  |
| Profit or loss account (Note 12) | 873 | (157) | 135 | 126
| Other comprehensive income | 27 | 4 | 27 | 4
| Balance at 31 December - net | 12,708 | 11,808 | 1,479 | 1,317

Deferred income taxes are calculated on all temporary differences using a principal tax
rate of 35% (2024: 35%) with the exception of investment property and freehold and
other property, for which deferred income taxes may be calculated using a principal tax
rate of 8% or 10% of the carrying amount (2024: 8% or 10%), if appropriate. The
analysis of deferred tax (assets)/liabilities is as follows:

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Temporary differences on property, plant and equipment | 7,077 | 6,358 | 1,520 | 1,240
| Temporary differences attributable to investment property, unrealised capital losses and fair value adjustments on financial assets | 10,550 | 10,523 | 1,155 | 1,191
| Temporary differences attributable to unabsorbed tax losses and allowances carried forward | (4,624) | (4,840) | (933) | (933)
| Temporary differences attributable to other provisions | (295) | (233) | (263) | (181)
| Balance at 31 December - net | 12,708 | 11,808 | 1,479 | 1,317

165
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
23. Deferred income tax - continued
Deferred income tax assets and liabilities are offset when there is a legally enforceable
right to set off a current tax asset against a current tax liability. The following amounts
determined after appropriate offsetting are shown in the statement of financial position:

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Deferred tax asset | (2,398) | (2,532) | (1,223) | (1,248)
| Deferred tax liability | 15,106 | 14,340 | 2,702 | 2,565
|  | 12,708 | 11,808 | 1,479 | 1,317

The deferred income tax assets and liabilities are, principally, recoverable after more
than 12 months.
Deferred income tax assets are recognised for tax loss carry-forwards to the extent that
the realisation of the related tax benefit through future taxable profits is probable.
The Group and Company have unutilised capital gains of €14.5 million (2024: €18.7
million), which give rise to a deferred tax asset of €5.1 million (2024: €6.5 million) that
has not been recognised in these financial statements. The Group also has unutilised
trading losses o f €0.5 million (2024: €0.7 million) giving rise to a deferred tax asset of
€0.2 million (2024: €0.2 million) which has not been recognised in these financial
statements.
The Group’s and Company’s deferred tax asset and liability were established on the
basis of tax rates that were substantively enacted as at the financial year en d.
166
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24. Insurance contract assets, insurance contract liabilities, reinsurance contract assets
and reinsurance contract liabilities
24.1 Composition of statement of financial position
An analysis of the amounts presented on the statement of financial position for
insurance contracts assets, insurance contract liabilities, reinsurance contract assets and
reinsurance contract liabilities, is shown in the table below:

| GROUP | Life Risk | Investment Contracts with DPF | Total long-term business | Short-term Under PAA | Total
|  | €'000 | €'000 | €'000 | €'000 | €'000
| As at 31 December 2025 |  |  |  |  |
| Insurance contract assets | 4,484 | — | 4,484 | — | 4,484
| Insurance contract liabilities | 57 | 1,928,847 | 1,928,904 | 75,737 | 2,004,641
| Reinsurance contract assets | — | — | — | 11,122 | 11,122
| Reinsurance contract liabilities | 15,225 | — | 15,225 | — | 15,225

| GROUP | Life Risk | Investments Contracts with DPF | Total long-term business | Short-term Under PAA | Total
|  | €’000 | €’000 | €’000 | €’000 | €’000
| As at 31 December 2024 |  |  |  |  |
| Insurance contract assets | 7,080 | — | 7,080 | — | 7,080
| Insurance contract liabilities | 6,400 | 1,948,078 | 1,954,478 | 72,968 | 2,027,446
| Reinsurance contract assets | — | — | — | 11,815 | 11,815
| Reinsurance contract liabilities | 17,073 | — | 17,073 | — | 17,073

Company |
| 2025 | 2024
| €’000 | €’000
Insurance contract liabilities | 75,737 | 72,968
Reinsurance contract assets | 11,122 | 11,815

Insurance liabilities and reinsurance assets in relation to short-term insurance contracts
are classified as current liabilities, in that, liability for incurred claims represent events
that happened and which would normally be settled within the normal operating cycle.
The timing of payment can be dependent on factors, like court cases, that could defer
such payment to beyond a year from the reporting date. Insurance and investment
contract liabilities in relation to long-term contracts are substantially non-current.
167
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.2 Short-term insurance contracts under PAA
Reconciliation of the liability for remaining coverage and the liability for incurred claims
The following tables present reconciliations from the opening to the closing balances of the
liability for remaining coverage (LRC) and liability for incurred claims (LIC).

| Group and Company | 2025
|  | LRC | LIC |
|  | Excluding loss component | Loss component | Present value of future cash flows | Risk adjustment for non- financial risk | Total
|  | €'000 | €'000 | €'000 | €'000 | €'000
| Insurance contract liabilities at 1 January | 35,072 | 186 | 36,792 | 918 | 72,968
| Insurance revenue | (109,693) | — | — | — | (109,693)
| Insurance service expenses |  |  |  |  |
| Incurred claims and other directly attributable expenses | — | — | 51,650 | 377 | 52,027
| Changes that relate to past service - changes in FCF relating to the LIC | — | — | 941 | (432) | 509
| Losses on onerous contracts and reversals of those losses | — | (186) | — | — | (186)
| Insurance acquisition cash flows amortisation | 31,125 | — | — | — | 31,125
| Insurance service expenses | 31,125 | (186) | 52,591 | (55) | 83,475
| Insurance service result | (78,568) | (186) | 52,591 | (55) | (26,218)
| Finance expenses from insurance contracts issued | — | — | 355 | 9 | 364
| Total amount recognised in comprehensive income | (78,568) | (186) | 52,946 | (46) | (25,854)
| Cash flows |  |  |  |  |
| Premiums received | 113,449 | — | — | — | 113,449
| Claims and other directly attributable expenses paid | — | — | (52,954) | — | (52,954)
| Insurance acquisition cash flows | (31,872) | — | — | — | (31,872)
| Total cash flows | 81,577 | — | (52,954) | — | 28,623
| Insurance contract liabilities at 31 December | 38,081 | — | 36,784 | 872 | 75,737
| Insurance contract liabilities at 31 December | 38,081 | 37,656 | 75,737

168
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.2 Short-term insurance contracts under PAA - continued
Reconciliation of the liability for remaining coverage and the liability for incurred
claims - continued

| Group and Company | 2024
|  | LRC | LIC |
|  | Excluding loss component | Loss component | Present value of future cash flows | Risk adjustment for non- financial risk | Total
|  | €'000 | €'000 | €'000 | €'000 | €'000
| Insurance contract liabilities at 1 January | 32,021 | — | 39,436 | 1,010 | 72,467
| Insurance revenue | (99,922) | — | — | — | (99,922)
| Insurance service expenses |  |  |  |  |
| Incurred claims and other directly attributable expenses | — | — | 48,602 | 325 | 48,927
| Changes that relate to past service - changes in FCF relating to the LIC | — | — | 1,260 | (438) | 822
| Losses on onerous contracts and reversals of those losses | — | 186 | — | — | 186
| Insurance acquisition cash flows amortisation | 28,562 | — | — | — | 28,562
| Insurance service expenses | 28,562 | 186 | 49,862 | (113) | 78,497
| Insurance service result | (71,360) | 186 | 49,862 | (113) | (21,425)
| Finance expenses from insurance contracts issued | — | — | 797 | 21 | 818
| Total amount recognised in comprehensive income | (71,360) | 186 | 50,659 | (92) | (20,607)
| Cash flows |  |  |  |  |
| Premiums received | 103,808 | — | — | — | 103,808
| Claims and other directly attributable expenses paid | — | — | (53,303) | — | (53,303)
| Insurance acquisition cash flows | (29,397) | — | — | — | (29,397)
| Total cash flows | 74,411 | — | (53,303) | — | 21,108
| Insurance contract liabilities at 31 December | 35,072 | 186 | 36,792 | 918 | 72,968
| Insurance contract liabilities at 31 December | 35,258 | 37,710 | 72,968

169
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.2 Short-term insurance contracts under PAA - continued
Reconciliation of the asset for remaining coverage and the asset for incurred claims
The following tables present reconciliations from the opening to the closing balances of the
asset for remaining coverage (ARC) and asset for incurred claims (AIC).
Group and Company

|  | 2025
|  | ARC | AIC |
| Remaining coverage excluding loss component | Present value of future cash flows | Risk adjustment for non- financial risk | Total
|  | €’000 | €’000 | €’000 | €’000
| Reinsurance contract assets at 1 January | 2,612 | 8,995 | 208 | 11,815
| Net income/(expense) from reinsurance contracts held |  |  |  |
| Reinsurance expenses | (13,242) | — | — | (13,242)
| Incurred claims recovery | — | 2,798 | 32 | 2,830
| Changes that relate to past service - changes in FCF relating to the AIC | — | 611 | (66) | 545
| Effect of changes in the risk of reinsurers' non- performance | — | 30 | — | 30
| Net expense from reinsurance contracts held | (13,242) | 3,439 | (34) | (9,837)
| Finance income from reinsurance contracts held | — | 91 | 3 | 94
| Total amount recognised in comprehensive income | (13,242) | 3,530 | (31) | (9,743)
| Cash flows |  |  |  |
| Premiums paid net of ceding commissions and other directly attributable expenses paid | 13,306 | — | — | 13,306
| Recoveries from reinsurance | — | (4,256) | — | (4,256)
| Total cash flows | 13,306 | (4,256) | — | 9,050
| Reinsurance contract assets at 31 December | 2,676 | 8,269 | 177 | 11,122

170
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.2 Short-term insurance contracts under PAA - continued
Reconciliation of the asset for remaining coverage and the asset for incurred claims -
continued

| Group and Company | 2024
|  | ARC |  |
|  | Remaining coverage excluding loss component | Present value of future cash flows | Risk adjustment for non- financial risk | Total
|  | €’000 | €’000 | €’000 | €’000
| Reinsurance contract assets at 1 January | 2,625 | 10,467 | 267 | 13,359
| Net income/(expense) from reinsurance contracts held |  |  |  |
| Reinsurance expenses | (12,763) | — | — | (12,763)
| Incurred claims recovery | — | 3,739 | 56 | 3,795
| Changes that relate to past service - changes in FCF relating to the AIC | — | 23 | (120) | (97)
| Effect of changes in the risk of reinsurers' non- performance | — | (30) | — | (30)
| Net expense from reinsurance contracts held | (12,763) | 3,732 | (64) | (9,095)
| Finance income from reinsurance contracts held | — | 176 | 5 | 181
| Total amount recognised in comprehensive income | (12,763) | 3,908 | (59) | (8,914)
| Cash flows |  |  |  |
| Premiums paid net of ceding commissions and other directly attributable expenses paid | 12,750 | — | — | 12,750
| Recoveries from reinsurance | — | (5,380) | — | (5,380)
| Total cash flows | 12,750 | (5,380) | — | 7,370
| Reinsurance contract assets at 31 December | 2,612 | 8,995 | 208 | 11,815

171
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.2 Short-term insurance contracts under PAA - continued
Short-term insurance contracts – liability for incurred claims
The gross claims reported are net of expected recoveries from salvage and subrogation.
The liability for incurred claims are largely based on claims incurred data. A Chain
Ladder approach using the Development Factor Method has been used projecting
separately each portfolio of contracts. In choosing the development factors, outliers that
would unrealistically favourably or adversely impact the estimation of the ultimate cost
are excluded. Large losses within each portfolio other than for Motor have not been
projected given the small and infrequent number of such claims over time and have
been taken at the case reserve. In the case of Motor, large losses, in the main involving
fatalities or serious bodily injury, are projected separately from attritional claims given
their severity and different development patterns.
The development tables in this note give an indication of the time it takes to settle
certain claims. This is attributable to certain classes of business taking several years to
develop and is also due to the length of time it takes for the respective cases to be
resolved in court.
The top half of the tables below illustrates how the Company’s estimate of the ultimate
total undiscounted claims cost for each accident year has changed at successive year-
ends on a gross and net basis. The bottom half of the table reconciles the cumulative
claims to the amount appearing in the statement of financial position on a gross and net
basis. The accident-year basis is the most appropriate for the general business written
by the Company.
The Group provides separately information on the gross and net basis the claims
development for the current reporting period and nine years prior to it. The diagonals
for financial years 2021 unti l 2024 show the undiscounted projected ultimate claims
incurred inclusive of claims related expenses as restated upon implementation of IFRS
17. The directors have considered that this does not detract the user from adequate
information as to how the claims have evolved from the particular accident year to the
current reporting period.
172
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract assets and reinsurance contract liabilities
- continued
24.2 Short-term insurance contracts under PAA - continued
Insurance contracts under the PAA – gross liability for incurred claims

| Group and Company |  |  |  |  |  |  |  |  |  |  |
| Accident year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Total
|  | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000
| Estimate of the ultimate claim cost undiscounted |  |  |  |  |  |  |  |  |  |  |
| -at end of accident year | 34,704 | 38,545 | 43,006 | 43,700 | 32,634 | 37,770 | 42,727 | 44,496 | 43,317 | 47,849 |
| -one year later | 35,127 | 39,334 | 44,264 | 47,172 | 32,240 | 37,618 | 41,788 | 44,452 | 42,991 |  |
| -two years later | 33,780 | 39,377 | 44,724 | 47,326 | 32,727 | 35,321 | 43,365 | 44,323 |  |  |
| -three years later | 33,211 | 39,741 | 45,831 | 49,511 | 32,333 | 35,384 | 42,730 |  |  |  |
| -four years later | 33,159 | 38,328 | 46,109 | 48,483 | 32,465 | 35,043 |  |  |  |  |
| -five years later | 33,045 | 38,099 | 46,392 | 48,291 | 32,459 |  |  |  |  |  |
| -six years later | 32,750 | 37,715 | 46,843 | 48,211 |  |  |  |  |  |  |
| -seven years later | 31,792 | 37,756 | 46,978 |  |  |  |  |  |  |  |
| -eight years later | 31,799 | 37,792 |  |  |  |  |  |  |  |  |
| -nine years later | 31,828 |  |  |  |  |  |  |  |  |  |
| Current estimates of cumulative claims | 31,828 | 37,792 | 46,978 | 48,211 | 32,459 | 35,043 | 42,730 | 44,323 | 42,991 | 47,849 | 410,204
| Cumulative payments to date | (31,559) | (37,481) | (44,078) | (46,494) | (30,920) | (34,079) | (39,501) | (40,450) | (39,308) | (30,316) | (374,186)
| accident years from 2016 to 2025 | 269 | 311 | 2,900 | 1,717 | 1,539 | 964 | 3,229 | 3,873 | 3,683 | 17,533 | 36,018
| Claims liabilities - prior accident years |  |  |  |  |  |  |  |  |  |  | 1,979
| Claims liabilities - Group Life |  |  |  |  |  |  |  |  |  |  | 510
| Effect of discounting |  |  |  |  |  |  |  |  |  |  | (1,723)
| Liability for incurred claims for the contracts originated |  |  |  |  |  |  |  |  |  |  | 36,784

173
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract assets and reinsurance contract liabilities
- continued
24.2 Short-term insurance contracts under PAA - continued
Insurance contracts net of reinsurance contracts assets under the PAA – net liability for incurred claims

| Group and Company |  |  |  |  |  |  |  |  |  |  |
| Accident year |  |  |  |  |  |  |  |  |  |  |
|  | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Total
|  | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000 | €’000
| Estimate of the ultimate claim cost undiscounted |  |  |  |  |  |  |  |  |  |  |
| -at end of accident year | 30,079 | 33,106 | 33,539 | 33,848 | 28,126 | 34,463 | 39,334 | 40,287 | 40,049 | 45,232 |
| -one year later | 30,320 | 33,951 | 33,645 | 35,714 | 27,881 | 34,094 | 38,818 | 39,942 | 39,457 |  |
| -two years later | 29,171 | 33,638 | 33,846 | 36,367 | 28,372 | 32,035 | 40,309 | 39,822 |  |  |
| -three years later | 28,863 | 33,325 | 32,704 | 37,032 | 28,358 | 32,087 | 39,660 |  |  |  |
| -four years later | 29,038 | 32,961 | 32,524 | 36,587 | 28,499 | 31,796 |  |  |  |  |
| -five years later | 28,994 | 32,732 | 33,182 | 36,591 | 28,488 |  |  |  |  |  |
| -six years later | 28,746 | 32,680 | 33,222 | 36,492 |  |  |  |  |  |  |
| -seven years later | 28,382 | 32,624 | 33,111 |  |  |  |  |  |  |  |
| -eight years later | 28,391 | 32,602 |  |  |  |  |  |  |  |  |
| -nine years later | 28,420 |  |  |  |  |  |  |  |  |  |
| Current estimates of cumulative claims | 28,420 | 32,602 | 33,111 | 36,492 | 28,488 | 31,796 | 39,660 | 39,822 | 39,457 | 45,232 | 355,080
| Cumulative payments to date | (28,213) | (32,684) | (32,699) | (35,886) | (27,007) | (30,958) | (36,610) | (36,222) | (37,111) | (29,392) | (326,782)
| Liability recognised in statements of financial position | 207 | (82) | 412 | 606 | 1,481 | 838 | 3,050 | 3,600 | 2,346 | 15,840 | 28,298
| Liability in respect of prior years |  |  |  |  |  |  |  |  |  |  | 1,110
| Liability in respect of life risk claims |  |  |  |  |  |  |  |  |  |  | 430
| Discounting element |  |  |  |  |  |  |  |  |  |  | (1,323)
| Total reserve included in the statements of the financial position |  |  |  |  |  |  |  |  |  |  | 28,515

174
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.2 Short-term insurance contracts under PAA - continued
(a) Assumptions
Discount rates
The bottom-up approach was adopted by the Group in determining a suitable discount
rate. Under this approach, the discount rate is determined as the risk-free yield. Given
the short-term nature of its insurance contracts liabilities and liquidity of cash flows, the
Group has selected the risk-free rates as published by EIOPA as appropriate for the
nature of its liabilities taking a zero illiquidity premium.
The yield curves used to discount the estimates of future cash flows that do not vary
based on the returns of the underlying items are as follows:

|  | 2025 | 2024
|  | No. of years | No. of years
|  | 1 | 5 | 10 | 1 | 5 | 10
| Short term insurance contracts issued and reinsurance contracts held | 2.1% | 2.5% | 2.9% | 2.2% | 2.1% | 2.3%

Risk adjustment for non-financial risk
Non-financial risk adjustment valuation reflects the compensation that the Group needs
to manage uncertainty regarding the amount and timing of future cash outflows, which
arise from non-financial risks from fulfilling insurance contract obligations.
Underwriting risks as well as other non-financial risks like portfolio expenses and
lapses are taken into consideration when determining this.
The non-financial risk adjustment has been estimated using a confidence-interval-based
approach, using Value at Risk (VaR) metrics for the probability distribution of the
current value of future cash flows, in line with Solvency II capital requirements, and
calibrating the target percentile confidence interval to 65 percentile. The Group
estimates an adjustment for non-financial risk separately from all other estimates.
175
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.2 Short-term insurance contracts under PAA - continued
(a) Assumptions - continued
Estimates of future cash flows to fulfil insurance contracts
LIC of short-term business insurance contracts, measured under the PAA, comprise of
the estimates of future cash flows. The estimates of future cash flows is derived using a
standard actuarial claims projection technique, the Chain Ladder method, other than for
non-motor large losses. The key assumptions underlying this technique is that past
claims development experience can be used to project future claims development.
Claims reserves which exceed a certain quantum (large losses), particularly those
involving fatalities and/or serious bodily injuries, are initially reserved at the case-by-
case reserve estimate. The measurement of claim payments due by the Group involves
the assessment of future settlements and is therefore dependent on assumptions around
determining such reserves based on, among others, legal precedent and current trends in
compensation awards. Specifically for Motor large losses, the Chain Ladder Method is
subsequently used to project the ultimate cost of these claims.
(b) Sensitivity analysis
The directors have considered the sensitivity of the key variables underlying the liability
for short-term contracts. The most sensitive assumptions are the development factors
and discount rate changes. Development factors can be impacted by claims inflation,
increase in claims frequency and severity. Sensitivity analysis for insurance risk has
been disclosed in Note 4. Sensitivity analysis for interest rate risk has also been
disclosed in Note 4.
176
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.3 Long-term insurance contracts - Life risk
Reconciliation of the asset or liability for remaining coverage and the liability for
incurred claims
The following tables present reconciliations from the opening to the closing balances of
the LRC (ARC) and LIC excluding any insurance acquisition cash flows assets and
other pre-recognition cash flows.

| Group | 2025
|  | LRC (ARC) | LIC | Total
|  | €’000 | €’000 | €’000
| Insurance contracs assets at 1 January | (9,978) | 2,898 | (7,080)
| Insurance contract liabilities at 1 January | 6,329 | 71 | 6,400
| Insurance revenue | (11,895) | — | (11,895)
| Insurance service expenses |  |  |
| Incurred claims and other directly attributable expenses | 12 | 4,466 | 4,478
| Changes that relate to past service - changes in the FCF relating to the LIC | — | (4) | (4)
| Insurance acquisition cash flows amortization | 217 | — | 217
| Insurance service expenses | 229 | 4,462 | 4,691
| Insurance service result | (11,666) | 4,462 | (7,204)
| Finance expenses from insurance contracts issued | 1,592 | — | 1,592
| Total amounts recognised in profit and loss | (10,074) | 4,462 | (5,612)
| Investment components | (677) | 677 | —
| Transfer to the other items in the statement of financial position (Note 25) | (6,023) | — | (6,023)
| Cash flows |  |  |
| Premium received | 16,059 | — | 16,059
| Claims and other directly attributable expenses | — | (6,045) | (6,045)
| Insurance acquisition cash flows | (2,126) | — | (2,126)
| Total cash flows | 13,933 | (6,045) | 7,888
| Insurance contract assets at 31 December | (6,490) | 2,006 | (4,484)
| Insurance contract liabilities at 31 December | — | 57 | 57

177
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.3 Long-term insurance contracts - Life risk - continued
Reconciliation of the asset or liability for remaining coverage and the liability for
incurred claims - continued

| Group | 2024
|  | LRC (ARC) | LIC | Total
|  | €’000 | €’000 | €’000
| Insurance contract assets at 1 January | (10,686) | 1,741 | (8,945)
| Insurance contract liabilities at 1 January | 6,441 | 47 | 6,488
| Insurance revenue | (13,310) | — | (13,310)
| Insurance service expenses |  |  |
| Incurred claims and other directly attributable expenses | — | 7,259 | 7,259
| Insurance acquisition cash flows amortization | 91 | — | 91
| Insurance service expenses | 91 | 7,259 | 7,350
| Insurance service result | (13,219) | 7,259 | (5,960)
| Finance income from insurance contracts issued | (836) | — | (836)
| Total amounts recognised in profit or loss | (14,055) | 7,259 | (6,796)
| Investment components | (934) | 934 | —
| Cash flows |  |  |
| Premium received | 16,076 | — | 16,076
| Claims and other directly attributable expenses | — | (7,012) | (7,012)
| Insurance acquisition cash flows | (491) | — | (491)
| Total cash flows | 15,585 | (7,012) | 8,573
| Insurance contract assets at 31 December | (9,978) | 2,898 | (7,080)
| Insurance contract liabilities at 31 December | 6,329 | 71 | 6,400

178
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.3 Long-term insurance contracts - Life risk - continued
Reconciliation of the measurement components of insurance contract balances

| Group | 2025
| Life Risk - Insurance contract Issued | Present value of future cash flows | Risk adjustment for non- financial risk | CSM | Total
|  | €’000 | €’000 | €’000 | €’000
| Insurance contract assets at 1 January | (56,173) | 15,542 | 33,551 | (7,080)
| Insurance contract liabilities at 1 January | 6,400 | — | — | 6,400
| Changes that relate to current service |  |  |  |
| CSM recognised for the services provided | — | — | (4,315) | (4,315)
| Change in the risk adjustment for non- financial risk for risk expired | — | (1,626) | — | (1,626)
| Experience adjustment relating to insurance service expenses | (1,259) | — | — | (1,259)
|  | (1,259) | (1,626) | (4,315) | (7,200)
| Changes that relate to future service |  |  |  |
| Changes in estimates that adjust the CSM | (5,174) | (53) | 5,227 | —
| Contracts initially recognised in the period | (6,447) | 1,974 | 4,473 | —
|  | (11,621) | 1,921 | 9,700 | —
| Changes that relate to past service | (4) | — | — | (4)
| Insurance service result | (12,884) | 295 | 5,385 | (7,204)
| Finance expenses from insurance contracts issued | 991 | — | 601 | 1,592
| Total amounts recognised in profit or loss | (11,893) | 295 | 5,986 | (5,612)
| Cash flows |  |  |  |
| Premium received | 16,059 | — | — | 16,059
| Claims and other directly attributable expenses paid | (6,045) | — | — | (6,045)
| Insurance acquisition cash flows | (2,126) | — | — | (2,126)
| Total cash flows | 7,888 | — | — | 7,888
| Transfer to other items in the Statement of Financial Position | (6,023) | — | — | (6,023)
| Insurance contract assets at 31 December | (59,858) | 15,837 | 39,537 | (4,484)
| Insurance contract liabilities at 31 December | 57 | — | — | 57

179
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.3 Long-term insurance contracts - Life risk - continued
Reconciliation of the measurement components of insurance contract balances - continued

| Group | 2024
| Total | Present value of future cash flows | Risk adjustment for non- financial risk | CSM | Total
|  | €’000 | €’000 | €’000 | €’000
| Insurance contract assets at 1 January | (56,044) | 14,905 | 32,194 | (8,945)
| Insurance contract liabilities at 1 January | 6,488 | — | — | 6,488
| Changes that relate to current service |  |  |  |
| CSM recognised for the services provided | — | — | (3,664) | (3,664)
| Change in the risk adjustment for non- financial risk for risk expired | — | (1,596) | — | (1,596)
| Experience adjustment relating to insurance service expenses | (700) | — | — | (700)
|  | (700) | (1,596) | (3,664) | (5,960)
| Changes that relate to future service |  |  |  |
| Changes in estimates that adjust the CSM | (1,810) | 450 | 1,360 | —
| Contracts initially recognised in the period | (4,940) | 1,783 | 3,157 | —
|  | (6,750) | 2,233 | 4,517 | —
| Insurance service result | (7,450) | 637 | 853 | (5,960)
| Finance (income)/expense from insurance contracts issued | (1,340) | — | 504 | (836)
| Total amounts recognised in profit or loss | (8,790) | 637 | 1,357 | (6,796)
| Cash flows |  |  |  |
| Premium received | 16,076 | — | — | 16,076
| Claims and other directly attributable expenses paid | (7,012) | — | — | (7,012)
| Insurance acquisition cash flows | (491) | — | — | (491)
| Total cash flows | 8,573 | — | — | 8,573
| Insurance contract assets at 31 December | (56,173) | 15,542 | 33,551 | (7,080)
| Insurance contract liabilities at 31 December | 6,400 | — | — | 6,400

180
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.3 Long-term insurance contracts - Life risk - continued
Impact of contracts recognised in the year

| Group | 2025 | 2024
|  | Non-onerous contracts originated | Non-onerous contracts originated
|  | €’000 | €’000
| Estimates of present value of future cash outflows |  |
| - Insurance acquisition cash flows | 2,440 | 520
| - Claims and other directly attributable expense | 7,615 | 8,793
|  | 10,055 | 9,313
| Estimates of the present value of future cash inflows | (16,502) | (14,253)
| Risk adjustment for non-financial risk adjustment | 1,974 | 1,783
| CSM | 4,473 | 3,157
| Increase in insurance contract liabilities from contracts recognised in the period | — | —

181
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.4 Life risk - Reinsurance contracts held
Reconciliation of the remaining coverage and incurred claims

| Group | 2025 | 2024
|  | Remaining coverage | Incurred Claims | Total | Remaining coverage | Incurred Claims | Total
|  | €’000 | €’000 | €’000 | €’000 | €’000 | €’000
| Reinsurance contract liabilities at 1 January | 21,788 | (4,715) | 17,073 | 19,171 | (3,678) | 15,493
| Net expenses from reinsurance contracts held |  |  |  |  |  |
| Reinsurance expenses | 4,022 | — | 4,022 | 4,083 | — | 4,083
| Other directly attributable expenses | — | 569 | 569 | — | 519 | 519
| Incurred claims recovery | — | (1,342) | (1,342) | — | (1,858) | (1,858)
| Net expense/(income) from reinsurance contracts held | 4,022 | (773) | 3,249 | 4,083 | (1,339) | 2,744
| Finance (income)/ expenses from reinsurance contracts held | (2,063) | — | (2,063) | 697 | — | 697
| Total amounts recognised in profit or loss | 1,959 | (773) | 1,186 | 4,780 | (1,339) | 3,441
| Cash flows |  |  |  |  |  |
| Premium paid net of ceding commission and other directly attributable expenses paid | (4,091) | (569) | (4,660) | (2,163) | (519) | (2,682)
| Recoveries from reinsurance | — | 1,626 | 1,626 | — | 821 | 821
| Total cash flows | (4,091) | 1,057 | (3,034) | (2,163) | 302 | (1,861)
| Reinsurance contract liabilities as at 31 December | 19,656 | (4,431) | 15,225 | 21,788 | (4,715) | 17,073

182
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.4 Life risk - Reinsurance contracts held - continued
Reconciliation of the measurement components of reinsurance contract balances

| Group | 2025
|  | Present value of future cash flows | Risk adjustment for non- financial risk | CSM | Total
|  | €’000 | €’000 | €’000 | €’000
| Reinsurance contract liabilities at 1 January | 36,762 | (5,665) | (14,024) | 17,073
| Changes that relate to current service |  |  |  |
| CSM recognised for the services received | — | — | 1,860 | 1,860
| Change in the risk adjustment for non- financial risk for risk expired | — | 322 | — | 322
| Experience adjustment relating to incurred claims and other directly attributable expenses recovery and reinsurance premium | 1,067 | — | — | 1,067
|  | 1,067 | 322 | 1,860 | 3,249
| Changes that relate to future service |  |  |  |
| Changes in estimates that adjust the CSM | 2,339 | 71 | (2,410) | —
| Contracts initially recognised in the period | 1,206 | (345) | (861) | —
|  | 3,545 | (274) | (3,271) | —
| Finance income from reinsurance contracts held | (1,842) | — | (221) | (2,063)
| Total amounts recognised in profit or loss | 2,770 | 48 | (1,632) | 1,186
| Cash flows |  |  |  |
| Premium paid net of ceding commission and other directly attributable expenses paid | (4,660) | — | — | (4,660)
| Recoveries from insurance | 1,626 | — | — | 1,626
| Total cash flows | (3,034) | — | — | (3,034)
| Reinsurance contract liabilities at 31 December | 36,498 | (5,617) | (15,656) | 15,225

183
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.4 Life risk - Reinsurance contracts held - continued
Reconciliation of the measurement components of reinsurance contract balances -
continued

| Group | 2024
|  | Present value of future cash flows | Risk adjustment for non- financial risk | CSM | Total
|  | €’000 | €’000 | €’000 | €’000
| Reinsurance contract liabilities at 1 January | 34,081 | (5,626) | (12,962) | 15,493
| Changes that relate to current service |  |  |  |
| CSM recognised for the services received | — | — | 1,651 | 1,651
| Change in the risk adjustment for non- financial risk for risk expired | — | 283 | — | 283
| Experience adjustment relating to incurred claims and other directly attributable expenses recovery and reinsurance premium | 810 | — | — | 810
|  | 810 | 283 | 1,651 | 2,744
| Changes that relate to future service |  |  |  |
| Changes in estimates that adjust the CSM | 2,276 | (36) | (2,240) | —
| Contracts initially recognised in the period | 587 | (286) | (301) | —
|  | 2,863 | (322) | (2,541) | —
| Finance expenses/( income) from reinsurance contracts held | 869 | — | (172) | 697
| Total amounts recognised in profit or loss | 4,542 | (39) | (1,062) | 3,441
| Cash flows |  |  |  |
| Premium paid net of ceding commission and other directly attributable expenses paid | (2,682) | — | — | (2,682)
| Recoveries from insurance | 821 | — | — | 821
| Total cash flows | (1,861) | — | — | (1,861)
| Reinsurance contract liabilities at 31 December | 36,762 | (5,665) | (14,024) | 17,073

184
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.4 Life risk - Reinsurance contracts held - continued
Impact of contracts recognised in the year

| Group | 2025 | 2024
|  | Contracts originated not in a net gain | Contracts originated in a net gain
|  | €’000 | €’000
| Estimates of the present value of future cash inflows | (3,669) | (3,632)
| Estimates of the present value of future cash outflows | 4,875 | 4,219
| Risk adjustment for non-financial risk | (345) | (286)
| CSM | (861) | (301)
| Increase in reinsurance contract assets from contracts recognised in the period | — | —

185
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.5 Investment contracts with DPF
Reconciliation of the liability for remaining coverage and the liability for incurred
claims

| Group | 2025 | 2024
|  | LRC Excluding Loss Component | LIC | Total | LRC Excluding Loss Component | LIC | Total
|  | €’000 | €’000 | €’000 | €’000 | €’000 | €’000
| Insurance contract liabilities at 1 January | 1,894,037 | 54,041 | 1,948,078 | 1,935,970 | 48,919 | 1,984,889
| Insurance revenue | (34,090) | — | (34,090) | (33,460) | — | (33,460)
| Insurance service expenses |  |  |  |  |  |
| Incurred claims and other directly attributable expenses | — | 18,689 | 18,689 | — | 21,845 | 21,845
| Insurance acquisition cash flows amortization | 7,268 | — | 7,268 | 4,338 | — | 4,338
| Insurance service expenses | 7,268 | 18,689 | 25,957 | 4,338 | 21,845 | 26,183
| Insurance service result | (26,822) | 18,689 | (8,133) | (29,122) | 21,845 | (7,277)
| Finance expenses from insurance contracts issued | 80,510 | — | 80,510 | 83,210 | — | 83,210
| Total amounts recognised in profit or loss | 53,688 | 18,689 | 72,377 | 54,088 | 21,845 | 75,933
| Investment components | (211,796) | 211,796 | — | (233,487) | 233,487 | —
| Cash flows |  |  |  |  |  |
| Premium received | 150,150 | — | 150,150 | 142,452 | — | 142,452
| Claims and other directly attributable expenses | — | (235,249) | (235,249) | — | (250,210) | (250,210)
| Insurance acquisition cash flows | (6,902) | — | (6,902) | (4,240) | — | (4,240)
| Decrease/(increase) in policy loans | 393 | — | 393 | (746) | — | (746)
| Total cash flows | 143,641 | (235,249) | (91,608) | 137,466 | (250,210) | (112,744)
| Insurance contract liabilities at 31 December | 1,879,570 | 49,277 | 1,928,847 | 1,894,037 | 54,041 | 1,948,078

186
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.5 Investment contracts with DPF - continued
Reconciliation of the measurement components of contract balances

| Group | 2025
|  | Present value of future cash flows | Risk adjustment for non- financial risk | CSM | Total
|  | €’000 | €’000 | €’000 | €’000
| Insurance contract liabilities at 1 January | 1,866,991 | 3,479 | 77,608 | 1,948,078
| Changes that relate to current service |  |  |  |
| CSM recognised for the services provided | — | — | (8,049) | (8,049)
| Change in the risk adjustment for non-financial risk for risk expired | — | (232) | — | (232)
| Experience adjustment | 148 | — | — | 148
|  | 148 | (232) | (8,049) | (8,133)
| Changes that relate to future service |  |  |  |
| Changes in estimates that adjust the CSM | (5,201) | (804) | 6,005 | —
| Contracts initially recognised in the period | (5,647) | 189 | 5,458 | —
| Experience adjustments arising from premiums received in the period that relate to future service | (241) | — | 241 | —
|  | (11,089) | (615) | 11,704 | —
| Insurance service result | (10,941) | (847) | 3,655 | (8,133)
| Finance expenses from insurance contracts issued | 80,510 | — | — | 80,510
| Total amounts recognised in profit or loss | 69,569 | (847) | 3,655 | 72,377
| Cash flows |  |  |  |
| Premium received | 150,150 | — | — | 150,150
| Claims and other directly attributable expenses paid | (235,249) | — | — | (235,249)
| Insurance acquisition cash flows | (6,902) | — | — | (6,902)
| Increase in policy loans | 393 | — | — | 393
| Total cash flows | (91,608) | — | — | (91,608)
| Insurance contract liabilities at 31 December | 1,844,952 | 2,632 | 81,263 | 1,928,847

187
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.5 Investment contracts with DPF - continued
Reconciliation of the measurement components of contract balances - continued

| Group | 2024
|  | Present value of future cash flows | Risk adjustment for non- financial risk | CSM | Total
|  | €’000 | €’000 | €’000 | €’000
| Insurance contract liabilities at 1 January | 1,910,347 | 2,815 | 71,727 | 1,984,889
| Changes that relate to current service |  |  |  |
| CSM recognised for the services provided | — | — | (7,128) | (7,128)
| Change in the risk adjustment for non-financial risk for risk expired | — | (228) | — | (228)
| Experience adjustment relating to insurance service expenses | 79 | — | — | 79
|  | 79 | (228) | (7,128) | (7,277)
| Changes that relate to future service |  |  |  |
| Changes in estimates that adjust the CSM | (8,215) | 669 | 7,546 | —
| Contracts initially recognised in the period | (3,095) | 223 | 2,872 | —
| Experience adjustments arising from premiums received in the period that relate to future service | (2,591) | — | 2,591 | —
|  | (13,901) | 892 | 13,009 | —
| Insurance service result | (13,822) | 664 | 5,881 | (7,277)
| Finance expenses from insurance contracts issued | 83,210 | — | — | 83,210
| Total amounts recognised in profit or loss | 69,388 | 664 | 5,881 | 75,933
| Cash flows |  |  |  |
| Premium received | 142,452 | — | — | 142,452
| Claims and other directly attributable expenses paid | (250,210) | — | — | (250,210)
| Insurance acquisition cash flows | (4,240) | — | — | (4,240)
| Increase in policy loans | (746) | — | — | (746)
| Total cash flows | (112,744) | — | — | (112,744)
| Insurance contract liabilities at 31 December | 1,866,991 | 3,479 | 77,608 | 1,948,078

188
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.5 Investment contracts with DPF - continued
Impact of contracts recognised in the year

| Group | 2025 | 2024
| Investment contracts with DPF | Non-onerous contracts originated | Non-onerous contracts originated
|  | €’000 | €’000
| Estimates of present value of future cash outflows |  |
| - Insurance acquisition cash flows | 6,421 | 4,014
| - Claims and other directly attributable expense | 144,181 | 149,277
|  | 150,602 | 153,291
| Estimates of the present value of future cash inflows | (156,249) | (156,386)
| Risk adjustment for non-financial risk adjustment | 189 | 223
| CSM | 5,458 | 2,872
| Increase in insurance contract liabilities from contracts recognised in the period | — | —

24.6 Long term contracts - inputs, assumptions and estimation techniques
In applying IFRS 17 measurement requirements, the below inputs, assumptions and
estimation techniques were used.
(a)Estimation techniques
Best estimate of future cash flows
The best estimate liability is the present value of expected future cash flows, discounted
using a yield curve (i.e. interest rates at different maturities at a given point in time).
The estimates of these future cash flows are based on probability-weighted expected
future cash flows. The Group estimates which cash flows are expected and the
probability that they will occur as at the measurement date. The projections allow for all
expected decrements and policyholder actions, including lapses. Future premiums are
taken into account up to the contract boundary. Allowance for future expenses take into
account both overheads and directly attributable expenses, and future expense inflation.
The cash flow projections is performed on a policy by policy basis.
Investment contracts with DPF liabilities include the cost of financial guarantees and
options. A market consistent stochastic valuation is used to calculate these costs.
Representative model pointing is used in these stochastic runs. For such contracts,
discretionary benefits are allowed for separately in the technical provisions. The
calculations reflect a pre-defined set of realistic management actions and policyholder
behaviour. The best estimate liability does not include the value of shareholder
transfers.
189
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.6 Long term contracts - inputs, assumptions and estimation techniques - continued
(a)Estimation techniques - continued
Best estimate of future cash flows - continued
For unit-linked business, the unit and non-unit components are unbundled for the
purposes of determining the best estimate liability.
Risk adjustment for non-financial risk
The risk adjustment for non-financial risk is the compensation that is required for
bearing the uncertainty about the amount and timing of cash flows that arises from non-
financial risk as the insurance contract is fulfilled. Because the risk adjustment
represents compensation for uncertainty, estimates are made on the degree of
diversification benefits and expected favourable and unfavourable outcomes in a way
that reflects the Group’s degree of risk aversion. The Group estimates an adjustment for
non-financial risk separately from all other estimates. The Group considers separately
the effect of reinsurance in the risk adjustment for non-financial risk of the underlying
insurance contracts. The risk adjustment applied by the Group only includes mortality
risk, lapse risk, and expenses risk and catastrophic risk.
The risk adjustment was calculated at the issuing entity level and then allocated down to
each group of contracts in accordance with their risk profiles. The value at risk (‘VaR’)
method was used to derive the overall risk adjustment for non-financial risk, whereby
the maximum loss that a portfolio can experience within a one year time horizon at a
confidence level of 85 percent is determined. This technique discounts future cash flows
of the best estimate liabilities under different possible scenarios to produce a risk
distribution. The risk adjustment is taken to be equal to the VaR with that confidence
interval less the value of the best estimate of the discounted cash flows.
(b) Assumptions
All assumptions are best estimate, with no prudential margins. The Group takes into
account all relevant available data, both internal and external, when arriving at
assumptions that best reflect the characteristics of the underlying insurance portfolio.
In calculating estimates of fulfilment cash flows, the Group uses information about past
events, current conditions and forecasts of future conditions. The Group’s estimate of
future cash flows is the mean of a range of scenarios that reflect the full range of
possible outcomes. Each scenario specifies the amount, timing and probability of cash
flows.
Assumptions used to develop estimates about future cash flows are reassessed at each
reporting date and adjusted where required.
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24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.6 Long term contracts - inputs, assumptions and estimation techniques - continued
(b)Assumptions - continued
Investment assets returns
For with-profits contracts, assumptions about future underlying investment returns are
made. Due to the measurement models applied and the nature of the products,
particularly the determination of the discount rates used to discount future estimates of
cash flows that vary with returns on underlying items, assumptions about future
underlying investment returns do not impact contract measurement significantly. There
are limited financial guarantees in these products. The liabilities associated with these
guarantees are measured using a market-consistent stochastic model. The interest rate
guarantee embedded in investment contracts with DPF was measured using stochastic
modelling, because the guarantee does not move symmetrically with different interest
rate scenarios. The guarantee was measured using a full range of scenarios representing
possible future risk-free interest rate environments published by European Insurance
and Occupational Pensions Authority (‘EIOPA’). Stochastic investment returns reflect
the volatility of the underlying assets.
For a sensitivity analysis, refer to Note 4.2(a).
Discount rates
The bottom-up approach was adopted by the Group in determining a suitable discount
rate. This approach was used to derive the discount rate for the cash flows that do not
vary based on the returns on underlying items in the investment contracts with DPF.
Under this approach, the discount rate is determined as the risk-free yield, adjusted for
differences in liquidity characteristics between the financial assets used to derive the
risk-free yield and the relevant liability cash flows (known as an ‘illiquidity premium’).
The risk-free rates used were as published by EIOPA and the Group evaluates the
illiquidity premium on a yearly basis.
Management uses judgement to assess liquidity characteristics of the liability cash
flows. The Group’s insurance contracts do not have a cash surrender value and hence,
its liabilities can be considered as illiquid which allows the Group to reflect the
illiquidity characteristics of these products via the illiquidity premium. The Group
decided to use a reference portfolio as an appropriate proxy for the term liabilities.
191
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Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.6 Long term contracts - inputs, assumptions and estimation techniques - continued
(b)Assumptions - continued
Discount rates - continued
On the other hand, the Group’s investment contracts with DPF have surrender value and
therefore, liabilities can be considered highly liquid. Thus, these are discounted using
the risk-free rates without applying any illiquidity adjustment. Cash flows varying based
on underlying items are discounted using a discount rate that reflects the volatility of the
underlying assets.
For a sensitivity analysis, refer to Note 4.2(a).
The yield curves used to discount the estimates of future cash flows that do not vary
based on the returns of the underlying items are as follows:

|  | 2025 | 2024
|  | No. of years | No. of years
| Product | 5 | 10 | 5 | 10
| Life risk (issued and reinsurance held) | 2.7% | 3.4% | 2.3% | 2.4%
| Investment contracts with DPF | 2.5% | 2.9% | 2.1% | 2.3%

Policy acquisition and maintenance expenses
The Group projects estimates of future expenses relating to fulfilment of contracts
within the scope of IFRS 17 using current expense levels adjusted for inflation, non-
recurring expenses and new budgeted expenses that the Group is expected to incur in
the future. Expenses comprise expenses directly attributable to the groups of contracts,
including an allocation of fixed and variable overheads.
The short-term expense inflation assumption is based on forecasts issued by the Central
Bank of Malta, adjusted for the Group’s own experience. The long-term expense
inflation assumption is based on the Central Bank of Malta long-term inflation target.
Expense inflation is considered to be a non-financial risk.
Where estimates of indirect expenses-related cash flows are determined at the portfolio
level or higher, they are allocated to groups of contracts on a systematic basis, such as
number of policies in force. A renewal per policy maintenance expense including
claims is derived for all portfolios.
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Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.6 Long term contracts - inputs, assumptions and estimation techniques - continued
(b)Assumptions - continued
Policy acquisition and maintenance expenses - continued

| 2025 | 2024
| € | €
Life Risk | €48.0 | 48.5
Investment contracts with DPF | 105.2 - 109.0 | 76.5 - 102.3

Acquisition cash flows are typically allocated to the groups of contracts from which
they arise or to which they relate. This includes an allocation of acquisition cash flows
among existing new business. An acquisition expense per new business policy is
derived for all portfolios.
The Group provides investment-return services for the investment contracts with DPF
to manage assets in policyholder accounts and investment-related services for the
contracts measured under the VFA. An investment expense per asset under management
is derived.
For a sensitivity analysis, refer to Note 4.1.
Mortality rates
Mortality experience is reviewed annually and assumptions are set separately for term
and investment contracts with DPF having regard to past experience, events not in data
and future expected mortality trends. The Group makes reference to the following
standard mortality table. This UK mortality table is based on male assured lives of
combined smoker status

|  | 2025 | 2024
| Life Risk | 44% TMC00 | 44% TMC00
| Investment contracts with DPF | 48% AMC00 | 48% AMC00

The Group fits its own experience as a percentage of the TMC00 and AMC00 (2024:
TMC00 and AMC00) mortality table and uses this as a basis for its mortality
assumption.
For a sensitivity analysis, refer to Note 4.1.
193
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Annual Report - 31 December 2025
24.Insurance contract assets, insurance contract liabilities, reinsurance contract
assets and reinsurance contract liabilities - continued
24.6 Long term contracts - inputs, assumptions and estimation techniques - continued
(b)Assumptions - continued
Lapse rates
The Group derives assumptions about lapse and surrender rates based on the Group's
own experience. Historical lapse and surrender rates are derived from the Group’s
policy administration data. An analysis is then performed of the Group’s historical rates
in comparison to the assumptions previously used. Statistical methods are used to derive
adjustments to reflect the Group’s own experience and any trends in the data, to arrive
at the probability-weighted expected lapse and surrender rates. Analysis is performed
and assumptions are set by major product lines.
For investment contracts with DPF, the Group incorporates dynamic lapsing. For these
products lapse experience also vary by market conditions and outlook.
The following assumptions about lapse and surrender rates were used. Methods used to
derive these assumptions have not changed in 2025.

| 2025 | 2024
Life Risk | 3.0% - 7.0% | 3.0% - 7.0%
Investment contracts with DPF | 0.5% - 5.5% | 0.5% - 6.0%

For a sensitivity analysis, refer to note 4.1.
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Annual Report - 31 December 2025
25.Investment contract liabilities
The table shows a reconciliation of the opening to closing balance for the investment
contract liabilities.

|  | Group
|  | 2025 | 2024
|  | €’000 | €’000
| Opening balance – 1 January | 179,685 | 123,253
| Contributions received | 43,350 | 47,684
| Benefits paid | (5,684) | (4,308)
| Investment return from underlying assets | 7,052 | 13,131
| Transfer from the other items in the Statement of Financial Position (Note 24) | 6,023 | —
| Asset management fees charged | (678) | (75)
| Closing balance – 31 December | 229,748 | 179,685

In the above reconciliation, the investment return from the underlying assets represents
changes in the fair value of the investment contract liabilities due to changes in market
conditions. Asset management fees charged in the profit or loss also includes trailer
fees.
The above liabilities are substantially non-current in nature.
26. Trade and other receivables

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Receivables from intermediaries | 21,548 | 18,313 | 21,548 | 18,313
| Other prepayments and receivables: |  |  |  |
| - prepayments and other receivables | 5,829 | 5,269 | 1,495 | 905
| - accrued interest and rent | 907 | 1,161 | 468 | 342
| - receivables from group undertakings | — | — | 715 | 624
| - receivables from associated undertaking | 15 | 226 | 15 | 226
| - other debtors | 5 | 205 | — | —
| Provision for impairment of receivables | (869) | (717) | (869) | (717)
|  | 27,435 | 24,457 | 23,372 | 19,693
| Current portion | 27,435 | 24,457 | 23,372 | 19,693

Balances due from subsidiary undertakings, associated undertaking and other
receivables are unsecured and non-interest bearing.
195
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Annual Report - 31 December 2025
26.Trade and other receivables - continued
Movements in the provision for impairment of receivables are as follows:

|  | Group and Company
|  | 2025 | 2024
|  | €’000 | €’000
| Balance as at 1 January | 717 | 535
| Increase in provision for impairment | 152 | 182
| Balance as at 31 December | 869 | 717

27.Cash and cash equivalents
For the purpose of the statement of cash flows, the year-end cash and cash equivalents
comprise the following:

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Cash at bank and in hand | 46,244 | 79,399 | 10,559 | 11,408
| T-Bills | 4,000 | 2,500 | 4,000 | 2,500
|  | 50,244 | 81,899 | 14,559 | 13,908

As at 31 December 2025 an amount of €1.7 million (2024: €6.2 million) within
deposits with banks or credit institutions, was held in a margin account as collateral
against exchange traded futures.
28.Share capital

|  |  | Group and Company
|  |  |  | 2025 | 2024
|  |  |  | €’000 | €’000
| Authorised |  |  |  |
| 150 million ordinary shares of €0.21 each |  | 31,500 | 31,500
| Issued and fully paid |  |  |  |
| 92 million ordinary shares of €0.21 each |  | 19,320 | 19,320

196
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Annual Report - 31 December 2025
29. Other reserves
Group

|  | Freehold land and buildings | FVOCI investments | Total
|  | €'000 | €'000 | €'000
| Balance at 1 January 2024 | 856 | (219) | 637
| Fair value movements - gross | — | 170 | 170
| Fair value movements - tax | — | (7) | (7)
| Balance at 31 December 2024 | 856 | (56) | 800
| Balance at 1 January 2025 | 856 | (56) | 800
| Fair value movements - gross | — | 10 | 10
| Fair value movements - tax | — | (4) | (4)
| FVOCI investment reclassified to profit or loss - gross | — | 59 | 59
| FVOCI investment reclassified to profit or loss - tax | — | (8) | (8)
| Revaluation gain on Property land and buildings - gross | 457 | — | 457
| Revaluation gain on Property land and buildings - tax | (13) | — | (13)
| Balance at 31 December 2025 | 1,300 | 1 | 1,301

The above reserves are not distributable reserves .
197
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Annual Report - 31 December 2025
29. Other reserves - continued
Company

|  | Investment in subsidiary undertakings | Investment in associated undertakings | Freehold land and buildings | FVOCI investments | Total
|  | €’000 | €’000 | €’000 | €’000 | €’000
| Balance at 1 January 2024 | 34,663 | 109 | — | (219) | 34,553
| Fair value movements - gross | — | — | — | 170 | 170
| Fair value movements - tax | — | — | — | (7) | (7)
| Other | — | (4) | — | — | (4)
| Balance at 31 December 2024 | 34,663 | 105 | — | (56) | 34,712
| Balance at 1 January 2025 | 34,663 | 105 | — | (56) | 34,712
| Fair value movements - gross | — | — | — | 10 | 10
| Fair value movements - tax | — | — | — | (4) | (4)
| FVOCI investment reclassified to profit or loss - gross | — | — | — | 59 | 59
| FVOCI investment reclassified to profit or loss - tax | — | — | — | (8) | (8)
| Revaluation gain on freehold land and buildings - gross | — | — | 196 | — | 196
| Revaluation gain on freehold land and buildings - tax | — | — | (13) | — | (13)
| Others | — | (11) |  | — | (11)
| Balance at 31 December 2025 | 34,663 | 94 | 183 | 1 | 34,941

The above reserves are not distributable reserves.
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Annual Report - 31 December 2025
30.Other payables

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Creditors arising out of insurance operations | 173 | 211 | 173 | 211
| Amount owed to associated undertakings | 203 | 236 | 203 | 236
| Amount owed to group undertakings | — | — | — | 1,177
| Social security and other tax payables | 5,135 | 4,364 | 1,937 | 1,761
| Accruals and other payables | 12,786 | 12,020 | 6,031 | 5,609
| Deferred income | 1,601 | 1,352 | 157 | 140
| Other creditors | 2,371 | 1,716 | — | —
|  | 22,269 | 19,899 | 8,501 | 9,134

| Current | 22,014 | 19,644 | 8,501 | 9,134
| Non-current | 255 | 255 | — | —
|  | 22,269 | 19,899 | 8,501 | 9,134

Balances due to subsidiary undertakings and associated undertaking are unsecured and
non-interest bearing.
Deferred income for the Group includes front-end fees received from holders of
investment contracts without DPF as a prepayment for asset management and related
services and rental income received in advance. These amounts are non-refundable and
are released to income as the services are rendered.
199
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Annual Report - 31 December 2025
31.Cash generated from operations
Reconciliation of profit before tax to cash (used in)/ generated from operations:

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Profit before tax | 29,618 | 24,804 | 16,872 | 10,531
| Adjustments for: |  |  |  |
| Depreciation (Note 18) | 1,029 | 1,125 | 636 | 626
| Increase in provision for impairment of receivables (Note 26) | 152 | 182 | 152 | 182
| Settlement of provision for liabilities and charges | (70) | (69) | (70) | (69)
| Amortisation (Note 16) | 5,490 | 5,080 | 2,048 | 2,226
| Depreciation of right-of-use assets | 413 | 411 | 395 | 370
| Lease payments against lease liabilities | (488) | (463) | (463) | (434)
| Investment return adjustments | (84,945) | (106,057) | (4,063) | (1,826)
| Loss on sale of property, plant and equipment | 4 | 92 | — | 93
| Property revaluation | — | (168) | — | —
| Movements in: |  |  |  |
| Trade and other receivables | (2,618) | 1,151 | (3,710) | 1,385
| Insurance and reinsurance contracts | (21,363) | (31,407) | 3,463 | 2,046
| Investment contract liabilities | 50,063 | 56,432 | — | —
| Other payables | 1,994 | 1,098 | (642) | (181)
| Cash (used in)/generated from operations | (20,721) | (47,789) | 14,618 | 14,949

200
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
32.Commitments
Capital commitments
Commitments for capital expenditure not provided for in these financial statements are
as follows:

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Authorised and not contracted for |  |  |  |
| - property, plant and equipment | 758 | 1,222 | 279 | 638
| - intangible assets | 500 | 2,657 | 280 | 714
| - investment property | 1,782 | 320 | 226 | 170
|  | 3,040 | 4,199 | 785 | 1,522

| Authorised and contracted for |  |  |  |
| - property, plant and equipment | 626 | 359 | 507 | 269
| - intangible assets | 3,497 | 2,864 | 2,096 | 2,053
| - investment property | 1,778 | 2,256 | — | —
| - other investments | 30,252 | 31,935 | — | —
|  | 36,153 | 37,414 | 2,603 | 2,322

Operating lease commitments – where a Group company is a lessor
The Group and the Company lease out certain premises under operating leases. The
future minimum lease payments receivable under non-cancellable operating leases are
disclosed in Note 17.
Rental income from operating leases recognised in profit or loss during the year is
disclosed in Note 8.
33.Contingencies
The Group and Company have given guarantees to third parties amounting to €0.1
million (2024: €0.1) not arising under contracts of insurance.
201
MAPFRE MIDDLESEA p.l.c.
Annual Report - 31 December 2025
3 4.Related party transaction s
In the normal course of business, the Group enters into various transactions with related
parties. Related parties are defined as those that have an ability to control or exercise
significant influence over the other party in making financial and operational decisions.
These include directors, key management personnel and shareholders, and their close
family members, who hold a substantial amount of the votes able to cast at general
meetings. Parent undertaki ng refers to MAPFRE S.A. and/or companies owned by
MAPFRE S.A.. Bank of Valletta p.l.c. is a related undertaking in light of its
shareholding in the Company and in MAPFRE MSV Life p.l.c.. Subsidiary
undertakings and associated undertakings refer to the companies listed in Notes 20 and
21 respectively.
Relevant particulars of related party transactions are as follows:
Group

|  | 2025 | 2024
|  | €’000 | €’000
| Sales of insurance contracts and other services |  |
| Transactions with a parent undertaking: |  |
| Commission received | 5,683 | 5,266
| Claims recoverable | 4,491 | 5,705
| Transactions with related undertaking: |  |
| Trailer fees receivable | 1 | 1
| Sale of insurance contracts | 2,560 | 246
| Dividends received and interest income | 2,324 | 1,611
| Rental income on investment property | 261 | 255
| Transactions with associated undertaking: |  |
| Sale of insurance contracts | 9 | 31
| Dividends received | 157 | 170
| Rental income on investment property | 48 | 44
| Reimbursement of expenses for back office support services | 45 | 23

202
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Annual Report - 31 December 2025
34.Related party transactions - continued
Group - continued

|  | 2025 | 2024
|  | €’000 | €’000
| Purchase of products and services |  |
| Transactions with a parent undertaking: |  |
| Reinsurance premium ceded | 20,619 | 19,522
| Staff development training & Fringe Benefits | 86 | 2
| Expat staff benefits and services | 24 | 97
| Computer maintenance, Group IT shared services | 2,146 | 1,440
| Capitalisation of software development | 42 | 1
| Other back office support services | 728 | 720
| Investment management services | 34 | 27
| Commission payable | 16 | 96
| Transactions with other related undertaking: |  |
| Acquisition costs payable | 3,867 | 3,449
| Bank charges | 213 | 223
| Investment management services | 36 | 45
| Claims paid | 611 | 556
| Transactions with associates undertaking: |  |
| Road side assistance and other back office support services | 2,877 | 2,819
| Claims paid | 4 | 8

203
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Annual Report - 31 December 2025
34.Related party transactions - continued
Company

|  | 2025 | 2024
|  | €’000 | €’000
| Sales of insurance contracts and other services |  |
| Transactions with a parent undertaking: |  |
| Commission received | 5,667 | 5,266
| Claims recoverable | 3,640 | 4,550
| Transactions with related undertaking: |  |
| Sale of insurance contracts | 2,560 | 246
| Dividends received and interest income | 214 | 91
| Trailer fees receivable | 1 | 1
| Transactions with subsidiary undertaking: |  |
| Sale of insurance contracts | 312 | 352
| Dividends received | 3,259 | 1,154
| Rental income on investment property | 29 | 29
| Rental income from sub-letting of shared premises | 45 | 44
| Reimbursement of expenses for back office support services | 1,321 | 1,226
| Transactions with associated undertaking: |  |
| Sale of insurance contracts | 9 | 31
| Dividends received | 157 | 170
| Rental income on investment property | 48 | 44
| Reimbursement of expenses for back office support services | 45 | 23

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Annual Report - 31 December 2025
34.Related party transactions - continued
Company - continued

|  | 2025 | 2024
|  | €’000 | €’000
| Purchase of products and services |  |
| Transactions with a parent undertaking: |  |
| Reinsurance premium ceded | 18,652 | 17,217
| Staff development training & fringe benefits | 75 | 2
| Expat staff benefits and services | 24 | 97
| Computer maintenance, Group IT shared services | 986 | 605
| Capitalisation of software development | 42 | 1
| Other back office support services | 535 | 519
| Investment management services | 34 | 27
| Transactions with other related parties: |  |
| Bank charges | 129 | 126
| Acquisition cost payable | 261 | —
| Claims paid | 611 | 556
| Transactions with subsidiaries |  |
| Reimbursement of expenses for back office support services | 2,503 | 2,348
| Claims paid | 1 | 4
| Employer's contribution to defined contribution work pension scheme | 124 | 104
| Transactions with associates |  |
| Road side assistance and other back office support services | 2,877 | 2,819
| Claims paid | 4 | 8

Key management personnel during 2025 and 2024 comprised the President & Chief
Executive Officer, Chief Executive Officers, General Manager, Chief Financial Officer,
Chief Officers and Chief Underwriters. Total remuneration paid by the Group to key
management personnel amounted to €3.9 million (Company: €1.8 million).
Corresponding figures for 2024 were €3.9 million paid by the Group and €2.0 million
paid by the Company.
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Annual Report - 31 December 2025
34.Related party transactions - continued
Year-end balances arising from the above transactions:

|  | Group | Company
|  | 2025 | 2024 | 2025 | 2024
|  | €’000 | €’000 | €’000 | €’000
| Financial assets at amortised cost |  |  |  |
| -Related undertaking | 180 | 144 | 180 | 144
| -Parent undertaking | 178 | 159 | 178 | 159
| Financial liabilities at amortised cost |  |  |  |
| -Parent undertaking | 1,492 | 693 | 1,194 | 495
| -Related undertaking | 265 | 353 | — | —
| Amounts owed to |  |  |  |
| -Associated undertaking | 188 | 236 | 188 | 236
| -Subsidiary undertaking | — | — | — | 1,014
| Amounts owed by |  |  |  |
| -Associated undertaking | (26) | 226 | — | 226
| -Subsidiary undertaking | — | — | 717 | 447
| -Parent undertaking | — | — | — | —
| Accruals - Parent undertaking | 818 | 325 | 300 | 216
| Reinsurance contract assets |  |  |  |
| -Parent undertaking | 16,579 | 16,858 | 16,012 | 16,057
| Assets for incurred claims |  |  |  |
| -Related undertaking | 275 | 188 | 275 | 188
| -Subsidiary undertaking | — | — | 5 | 5
| -Associated undertaking | — | 3 | — | 3
| Investment in related undertakings | 20,626 | 17,064 | 1,171 | 969
| Cash and cash equivalents with related undertakings | 32,853 | 55,879 | 7,283 | 8,795

All balances above have arisen in the course of the Group’s and Company’s normal
operations. Balances due from/to these undertakings are unsecured and non-interest
bearing.
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Annual Report - 31 December 2025
35. Statutory information
MAPFRE Middlesea p.l.c. is a public limited company and is incorporated in Malta.
The Group is 55.83% owned by MAPFRE Internaciona l S.A. (the “immediate parent”),
a company registered in Spain, the registered office of which is situated at Carretera de
Pozuelo 52, Majadahonda 28222, Madrid, Spain.
The Group’s ultimate parent is Fundación MAPFRE, the registered office of which is
situated at Paseo de Recoletos 23, 28004, Madrid, Spain.
The Group’s results are consolidated at MAPFRE S.A. level of which Fundación
MAPFRE is the parent and MAPFRE Internacional S.A. is the subsidiary. MAPFRE
S.A. is a company the registered office of which is situated at Carretera de Pozuelo 52,
Majadahonda 28222, Madrid, Spain.
KPMG, a Maltese civil partnershipand a member firm of the KPMG global The firm is registered as a A list of partners and directors of
organisation of independent member firms affiliated with KPMG partnership of Certified Public the firm is available at Portico
International Limited, a private English company limited guarantee.Accountants in terms of the Building, Marina Street, Pietà,
Accountancy Profession Act PTA9044, Malta.
KPMG
92, Marina Street
Pietà, PTA 9044
Malta
Telephone(+356) 2563 1000
Fax (+356) 2566 1000
Website www.kpmg.com.mt
Independent Auditors’ Report
To the Shareholders of MAPFRE Middlesea p.l.c.
1 Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of MAPFRE Middlesea p.l.c. (the “Company”) and of the
Group of which the Company is the parent, which comprise the statements of financial position as at
31 December 2025, the statements of profit or loss and other comprehensive income, changes in
equity and cash flows for the year then ended, and notes, comprising material accounting policies and
other explanatory information.
In our opinion, the accompanying financial statements:
(a) give a true and fair view of the financial position of the Company and of the Group as at 31
December 2025, and of their financial performance and their cash flows for the year then
ended in accordance with International Financial Reporting Standards (“IFRS”) as adopted by
the EU; and
a. have been properly prepared in accordance with the provisions of the Companies Act, 1995
(Chapter 386, Laws of Malta) (the “Act”) and the Insurance Business Act, 1998 (Chapter 403,
Laws of Malta) (the “Insurance Business Act”) and, additionally, specifically in relation to those
of the Group, with the requirements of Article 4 of Regulation (EC) No 1606/2002 on the
application of international accounting standards (the “Regulation”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our
responsibilities under those standards are further described in the Auditors’ responsibilities for the
audit of the financial statements section of our report. We are independent of the Company and the
Group in accordance with the International Ethics Standards Board for Accountants’ International
Code of Ethics for Professional Accountants (including International Independence Standards)
(“IESBA Code”), as applicable to audits of the financial statements of public interest entities, together
with the ethical requirements that are relevant to our audit of the financial statements in accordance
with the Accountancy Profession (Code of Ethics for Warrant Holders) Directive issued in terms of the
Accountancy Profession Act (Chapter 281, Laws of Malta) (“APA”), and we have fulfilled our other
ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis f or our opinion.
KPMG, a Maltese civil partnershipand a member firm of the KPMG global The firm is registered as a A list of partners and directors of
organisation of independent member firms affiliated with KPMG partnership of Certified Public the firm is available at Portico
International Limited, a private English company limited guarantee.Accountants in terms of the Building, Marina Street, Pietà,
Accountancy Profession Act PTA9044, Malta.
KPMG
92, Marina Street
Pietà, PTA 9044
Malta
Telephone (+356) 2563 1000
Fax (+356) 2566 1000
Website www.kpmg.com.mt
Independent Auditors’ Report (continued)
To the Shareholders of MAPFRE Middlesea p.l.c
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Estimates of the liability for incurred claims (“LIC”) with respect to short-term contracts
Accounting policy note 2.10 and Notes 3 and 24 to the financial statements for further disclosures
LIC for short-term contracts (€37,656 thousand) within ‘Insurance Contract Liabilities’
The liability for incurred claims is measured as the total of the expected fulfilment cash flows relating
to insurance events that occurred by the financial reporting date, which comprise estimates of future
cash flows, adjusted to reflect the time value of money and a risk adjustment for non-financial risks.
We have considered the estimate of future cash flows as a key audit matter in view of the significant
assumptions that drive the estimate, being the subjectivity surrounding: the determination of the
development factors for the estimates of future cash flows derived using actuarial claims projection;
and the claims handlers’ judgement for specific claims reserves which exceed a certain quantum.
Due to the degree of such inherent estimation uncertainty underlying the estimate of future cash
flows, the amounts recognized in the statement of financial position may be different to those
eventually settled. Those differences may be material.
Our response
Our procedures include:
• With respect to the actuarial claims projected, we used our own actuarial specialist to develop
an independent expectation using actuarial standard techniques, as well as industry
knowledge and experience, and;
• In relation to the specific claims reserves which exceed a certain quantum, we evaluated the
judgements made by the claims handlers based on the information available to the Company
at the financial reporting date.
Key observation
We have no key observations to report, specific to this matter.
KPMG, a Maltese civil partnershipand a member firm of the KPMG global The firm is registered as a A list of partners and directors of
organisation of independent member firms affiliated with KPMG partnership of Certified Public the firm is available at Portico
International Limited, a private English company limited guarantee.Accountants in terms of the Building, Marina Street, Pietà,
Accountancy Profession Act PTA9044, Malta.
KPMG
92, Marina Street
Pietà, PTA 9044
Malta
Telephone(+356) 2563 1000
Fax (+356) 2566 1000
Website www.kpmg.com.mt
Independent Auditors’ Report (continued)
To the Shareholders of MAPFRE Middlesea p.l.c
Measurement of assets and liabilities for remaining coverage (“ARC” and “LRC”) for
insurance contracts and reinsurance contracts held in relation to long-term contracts carried
out by the main subsidiary of the Group, MAPFRE MSV Life p.l.c. (MMSV)
Accounting policy 2.10 and Notes 3 and 24 to the financial statements for further disclosures
ARC and LRC for long-term contracts within the ‘Insurance contract assets’ (€4,484 thousand),
‘Insurance contract liabilities' (€1,928,904 thousand) and ‘Reinsurer’s contract liabilities’ (€15,225
thousand)
MMSV enters into insurance contracts which comprise term and unit-linked contracts with significant
insurance risk and investment contracts with discretionary participation features (“DPF”). MMSV also
holds reinsurance contracts to cover its term business.
MMSV applies the general measurement model on its insurance contracts and reinsurance contracts
held, and the variable fee approach on investment contracts with DPF.
ARC and LRC are measured as the total of (i) the expected fulfillment cash flows (“FCF”), which
comprise estimates of future cash flows within the contract boundary, adjusted to reflect the time
value of money and the associated financial risks, and a risk adjustment for non-financial risks; and
(ii) the contractual service margin (“CSM”), which represents the unearned profit that MMSV will
recognize as it provides insurance contract services in the future. The measurement of ARC and LRC
involves use of current and historic data, actuarial methods and models, and significant assumptions
for the estimation of future cash flows.
We have considered the measurement of ARC and LRC as a key audit matter in view of the nature
and subjectivity of the estimate, and its overall inherent estimation uncertainty. The subjectivity
involved relates mainly to the judgement involved in the selection of actuarial assumptions. Due to the
degree of such inherent estimation uncertainty, the ultimate total settlement value may be different
from the a mounts provided, and the amount of CSM may be different from the amounts recognized as
profit in the future. Those differences may be material.
KPMG, a Maltese civil partnershipand a member firm of the KPMG global The firm is registered as a A list of partners and directors of
organisation of independent member firms affiliated with KPMG partnership of Certified Public the firm is available at Portico
International Limited, a private English company limited guarantee.Accountants in terms of the Building, Marina Street, Pietà,
Accountancy Profession Act PTA9044, Malta.
KPMG
92, Marina Street
Pietà, PTA 9044
Malta
Telephone(+356) 2563 1000
Fax (+356) 2566 1000
Website www.kpmg.com.mt
Independent Auditors’ Report (continued)
To the Shareholders of MAPFRE Middlesea p.l.c
Measurement of assets and liabilities for remaining coverage (“ARC” and “LRC”) for
insurance contracts and reinsurance contracts held in relation to long-term contracts carried
out by the main subsidiary of the Group, MAPFRE MSV Life p.l.c. (MMSV) (continued)
Our response
As part of our procedures, we evaluated the ARC and LRC by performing audit procedures which
included:
• the involvement of our actuarial specialist to assist us in:
• assessing and challenging the significant assumptions selected by applying our
experience, industry knowledge, and reference to the related accounting standards; and
• evaluating MMSV’s estimate of ARC and LRC by assessing the overall liability
movements based on the assumptions and data applied;
• testing of the underlying data elements by reference to MMSV’s actual cash flows and policy
data; and
• considering the adequacy of the related disclosures to the financial statements.
Key observation
We have no key o bservations to report, specific to this matter.
Other information
The directors are responsible for the other information which comprises the:
• ‘Chairman’s Statement’;
• ‘President & Chief Executive Officer’s Statement’;
• ‘Directors’ Report’;
• ‘Corporate Governance Statement’; and
• ‘Remuneration Statement and Report of the Remuneration Committee to the Shareholders’,
but does not include the financial statements and our auditors’ report thereon.
Our opinion on the financial statements does not cover the other information and, other than in the
case of the directors’ report, and the corporate governance statement of compliance and the
remuneration report (included in the Annual report in the ‘Corporate Governance Statement’ and
‘Remuneration Statement and Report of the Remuneration Committee to the Shareholders’,
respectively), on which we report separately be low in our ‘Report on Other Legal and Regulatory
Requirements’, we do not express any form of assurance conclusion thereon.
KPMG, a Maltese civil partnershipand a member firm of the KPMG global The firm is registered as a A list of partners and directors of
organisation of independent member firms affiliated with KPMG partnership of Certified Public the firm is available at Portico
International Limited, a private English company limited guarantee.Accountants in terms of the Building, Marina Street, Pietà,
Accountancy Profession Act PTA9044, Malta.
KPMG
92, Marina Street
Pietà, PTA 9044
Malta
Telephone(+356) 2563 1000
Fax (+356) 2566 1000
Independent Auditors’ Report (continued)
To the Shareholders of MAPFRE Middlesea p.l.c
Other information (continued)
In connection with our audit of the financial statements, our responsibility is to read the other
information, and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report
in this regard.
Responsibilities of the directors for the financial statements
The directors are responsible for the preparation of financial statements that (a) give a true and fair
view in accordance with IFRS as adopted by the EU, and (b) are properly prepared in accordance
with the provisions of the Act and the Insurance Business Act, and, additionally, specifically in relation
to those of the Group, with the requirements of Article 4 of the Regulation. The directors are also
responsible for such internal control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company’s and
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate
the Company and/or the Group or to cease operations, or have no realistic alternative but to do so.
The directors are also responsible for overseeing the financial reporting process.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report
that includes our opinion. ‘Reasonable assurance’ is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain
professional scepticism throughout the audit.
KPMG, a Maltese civil partnershipand a member firm of the KPMG global The firm is registered as a A list of partners and directors of
organisation of independent member firms affiliated with KPMG partnership of Certified Public the firm is available at Portico
International Limited, a private English company limited guarantee.Accountants in terms of the Building, Marina Street, Pietà,
Accountancy Profession Act PTA9044, Malta.
KPMG
92, Marina Street
Pietà, PTA 9044
Malta
Telephone(+356) 2563 1000
Fax (+356) 2566 1000
Website www.kpmg.com.mt
Independent Auditors’ Report (continued)
To the Shareholders of MAPFRE Middlesea p.l.c
Auditors’ responsibilities for the audit of the financial statements (continued)
We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Consider the extent of compliance with those laws and regulations that directly affect the financial
statements, as part of our procedures on the related financial statement items. For the remaining
laws and regulations, we make enquiries of directors and other management, and inspect
correspondence with the regulatory authority, as well as legal correspondence. As with fraud,
there remains a higher risk of non-detection of other irregularities (whether or not these relate to
an area of law directly related to the financial statements), as these may likewise involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s and the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company’s and the Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditors’ report to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditors’ report. However, future events or conditions
may cause the Company and/or the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
KPMG, a Maltese civil partnershipand a member firm of the KPMG global The firm is registered as a A list of partners and directors of
organisation of independent member firms affiliated with KPMG partnership of Certified Public the firm is available at Portico
International Limited, a private English company limited guarantee.Accountants in terms of the Building, Marina Street, Pietà,
Accountancy Profession Act PTA9044, Malta.
KPMG
92 Marina Street
Pietà, PTA 9044
Malta
Telephone(+356) 2563 1000
Fax (+356) 2566 1000
Website www.kpmg.com.mt
Independent Auditors’ Report (continued)
To the Shareholders of MAPFRE Middlesea p.l.c
Auditors’ responsibilities for the audit of the financial statements (continued)
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the Group audit.
We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditors’ report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse
con sequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
KPMG, a Maltese civil partnershipand a member firm of the KPMG global The firm is registered as a A list of partners and directors of
organisation of independent member firms affiliated with KPMG partnership of Certified Public the firm is available at Portico
International Limited, a private English company limited guarantee.Accountants in terms of the Building, Marina Street, Pietà,
Accountancy Profession Act PTA9044, Malta.
KPMG
92, Marina Street
Pietà, PTA 9044
Malta
Telephone(+356) 2563 1000
Fax (+356) 2566 1000
Website www.kpmg.com.mt
Independent Auditors’ Report (continued)
To the Shareholders of MAPFRE Middlesea p.l.c
2 Report on Other Legal and Regulatory Requirements
Opinion on the Directors’ Report
The directors are responsible for preparing a directors’ report in accordance with the provisions of
article 177 of the Act and Rule 5.64 of the Capital Markets Rules issued by the Malta Financial
Services Authority (the “Capital Market Rules”), and is to include a statement that the Company is a
going concern with supporting assumptions or qualifications as necessary, as required by Rule 5.62 of
the Capital Markets Rules.
We are required to consider whether the information given in the directors’ report for the accounting
period for which the financial statements are prepared is consistent with those financial statements;
and, if we are of the opinion that it is not, we shall state that fact in our report. We have nothing to
report in this regard.
Pursuant to article 179(3) of the Act, we are also required to:
• express an opinion on whether the directors’ report has been prepared in accordance with the
applicable legal requirements; and
• state whether, in the light of the knowledge and understanding of the entity and its
environment obtained in the course of our audit of the financial statements, we have identified
material misstatements in the directors’ report, giving an indication of the nature of any such
misstatements.
Pursuant to Rule 5.62 of the Capital Markets Rules, we are required to review the directors’ statement
in relation to going concern.
In such regards:
• in our opinion, the directors’ report has been prepared in accordance with the applicable legal
requirements;
• we have not identified material misstatements in the directors’ report; and
• we have nothing to report in relation to the statement on going concern.
KPMG, a Maltese civil partnershipand a member firm of the KPMG global The firm is registered as a A list of partners and directors of
organisation of independent member firms affiliated with KPMG partnership of Certified Public the firm is available at Portico
International Limited, a private English company limited guarantee.Accountants in terms of the Building, Marina Street, Pietà,
Accountancy Profession Act PTA9044, Malta.
KPMG
92,Marina Street
Pietà, PTA 9044
Malta
Telephone(+356) 2563 1000
Fax (+356) 2566 1000
Website www.kpmg.com.mt
Independent Auditors’ Report (continued)
To the Shareholders of MAPFRE Middlesea p.l.c
2 Report on Other Legal and Regulatory Requirements
Report on Corporate Governance Statement of Compliance
Pursuant to Rule 5.94 of the Capital Market Rules, the directors are required to prepare and include in
the Company’s Annual Report a Corporate Governance Statement of Compliance explaining the
extent to which they have adopted the Code of Principles of Good Corporate Governance set out in
Appendix 5.1 to Chapter 5 of the Capital Markets Rules, and the effective measures that they have
taken to ensure compliance with those principles. The Corporate Governance Statement of
Compliance is to contain at least the information set out in Rule 5.97 of the Capital Markets Rules.
Our responsibility is laid down by Rule 5.98 of the Capital Markets Rules, which requires us to include
a report to shareholders on the Corporate Governance Statement of Compliance (included in the
Annual report in the ‘Corporate Governance Statement’) in the Company’s Annual Report by
expressing an opinion as to whether, in light of the knowledge and understanding of the Company and
its environment obtained in the course of the audit, we have identified any material misstatements
with respect to the information referred to in Capital Markets Rules 5.97.4 (dealing with the
Company’s internal control and risk management systems in relation to the financial reporting
process) and 5.97.5 (where a takeover bid applies). Where material misstatements are identified in
relation to those requirements, we shall, in addition to our conclusion, provide an indication of the
nature of such misstatements. We are also required to assess whether the Corporate Governance
Statement of Compliance includes the other information required by Capital Markets Rule 5.97,
insofar as it is applicable to the Company.
We are not required to, and we do not, consider whether the directors’ statements on internal control
and risk management systems cover all the risks and controls in relation to the financial reporting
process or form an opinion on the effectiveness of the Company’s corporate governance procedures
or its risk and control procedures, nor on the ability of the Company to continue in operational
existence.
In our opinion, in light of our knowledge and understanding of the Company and its environment
obtained in the course of the audit, we have not identified material misstatements with respect to the
information requirements referred to in Capital Markets Rules 5.97.4 and 5.97.5, and the Corporate
Governance Statement of Compliance includes the other information required by Capital Markets
R ule 5.97.
KPMG, a Maltese civil partnershipand a member firm of the KPMG global The firm is registered as a A list of partners and directors of
organisation of independent member firms affiliated with KPMG partnership of Certified Public the firm is available at Portico
International Limited, a private English company limited guarantee.Accountants in terms of the Building, Marina Street, Pietà,
Accountancy Profession Act PTA9044, Malta.
KPMG
92, Marina Street
Pietà, PTA 9044
Malta
Telephone(+356) 2563 1000
Fax (+356) 2566 1000
Website www.kpmg.com.mt
Independent Auditors’ Report (continued)
To the Shareholders of MAPFRE Middlesea p.l.c
2 Report on Other Legal and Regulatory Requirements (continued)
Report on Remuneration Report
Pursuant to Rule 12.26K of the Capital Markets Rules, the directors are required to prepare a
Remuneration Report (included in the Annual report in the ‘Remuneration Statement and Report of
the Remuneration Committee to the Shareholders’), including the contents required by Appendix 12.1
‘Information to be provided in the Remuneration Report’ to Chapter 12 of the Capital Markets Rules.
Our responsibility is laid down by Rule 12.26N of the Capital Markets Rules, which requires us to
consider whether the information that should be provided in the Remuneration Report, as required in
terms of Appendix 12.1 to Chapter 12 of the Capital Markets Rules, has been included (as
applicable).
In our opinion, the Remuneration Report includes the information required by Appendix 12.1 to
Chapter 12 of the Capital Markets Rules.
Matters on which we are required to report by the Act, specific to public-interest entities
Pursuant to article 179B(1) of the Act, we report as under matters not already reported upon in our
‘Report on the Audit of the Financial Statements’:
• we were first appointed as auditors by the shareholders on 15 July 2015, and subsequently
reappointed at the Company’s general meetings for each financial period thereafter. The
period of total uninterrupted engagement is eleven years;
• our opinion on our audit of the financial statements is consistent with the additional report to
the audit committee required to be issued by the Audit Regulation (as referred to in the Act);
and
• we have not provided any of the prohibited services as set out in the APA.
KPMG, a Maltese civil partnershipand a member firm of the KPMG global The firm is registered as a A list of partners and directors of
organisation of independent member firms affiliated with KPMG partnership of Certified Public the firm is available at Portico
International Limited, a private English company limited guarantee.Accountants in terms of the Building, Marina Street, Pietà,
Accountancy Profession Act PTA9044, Malta.
KPMG
92, Marina Street
Pietà, PTA 9044
Malta
Telephone(+356) 2563 1000
Fax (+356) 2566 1000
Website www.kpmg.com.mt
Independent Auditors’ Report (continued)
To the Shareholders of MAPFRE Middlesea p.l.c
2 Report on Other Legal and Regulatory Requirements (continued)
Matters on which we are required to report by exception by the Act
Pursuant to articles 179(10) and 179(11) of the Act, we have nothing to report to you with respect to
the following matters:
• proper accounting records have not been kept; or
• the financial statements are not in agreement with the accounting records; or
• we have not obtained all the information and explanations which, to the best of our knowledge
and belief, we require for the purpose of our audit.
Report on compliance of the Annual Report with the requirements of the Commission
Delegated Regulation (EU) 2018/815 supplementing Directive 2004/109/EC (the “European
Single Electronic Format Regulatory Technical Standard” or “ESEF Regulation”), by reference
to Capital Markets Rule 5.55.6 issued by the Malta Financial Services Authority
We have undertaken a reasonable assurance engagement in accordance with the requirements of
Directive 6 issued by the Accountancy Board in terms of the Accountancy Profession Act, 1979
(Chapter 281, Laws of Malta), the Accountancy Profession (European Single Electronic Format)
Assurance Directive, on the Annual Report for the year ended 31 December 2025, prepared in a
single electronic reporting format.
Responsibilities of the directors for compliance with the requirements of the ESEF Regulation
As required by Capital Markets Rule 5.56A, the directors are responsible for the preparation of the
Annual Report in XHTML format, including the relevant mark-ups, in accordance with the
requirements of the ESEF Regulation.
In addition, the directors are responsible for such internal control as they determine is necessary to
enable the preparation of the Annual Report that is in compliance with the requirements of the ESEF
Regulation.
Our responsibility is to obtain reasonable assurance about whether the Annual Report in XHTML
format, including the relevant mark-ups, comply in all material respects with the ESEF Regulation
based on the evidence we have obtained. As part of our work, we obtain an understanding of the
Company’s controls relevant to the preparation of the Annual Report in compliance with the said
requirements, but not for the purpose of expressing an opinion on the effectiveness of the controls in
place.
KPMG, a Maltese civil partnershipand a member firm of the KPMG global The firm is registered as a A list of partners and directors of
organisation of independent member firms affiliated with KPMG partnership of Certified Public the firm is available at Portico
International Limited, a private English company limited guarantee.Accountants in terms of the Building, Marina Street, Pietà,
Accountancy Profession Act PTA9044, Malta.
KPMG
92, Marina Street
Pietà, PTA 9044
Malta
Telephone(+356) 2563 1000
Fax (+356) 2566 1000
Website www.kpmg.com.mt
Independent Auditors’ Report (continued)
To the Shareholders of MAPFRE Middlesea p.l.c.
2 Report on Other Legal and Regulatory Requirements (continued)
Report on compliance of the Annual Report with the requirements of the Commission
Delegated Regulation (EU) 2018/815 supplementing Directive 2004/109/EC (the “European
Single Electronic Format Regulatory Technical Standard” or “ESEF Regulation”), by reference
to Capital Markets Rule 5.55.6 issued by the Malta Financial Services Authority (continued)
Auditors’ responsibilities to report on compliance with the requirements of the ESEF Regulation
(continued)
In discharging that responsibility, we:
• obtain an understanding of the entity's financial reporting process, including the preparation of
the Annual Report, in accordance with the requirements of the ESEF Regulation;
• perform validations to determine whether the Annual Report has been prepared in
accordance with the requirements of the technical specifications of the ESEF Regulation; and
• examine the information in the Annual Report to determine whether all the required mark-ups
therein have been applied and whether, in all material respects, they are in accordance with
the requirements of the ESEF Regulation.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
conclusion.
Conclusion
In our opinion, the Annual Report for the year ended 31 December 2025 has been prepared, in all
material respects, in accordance with the requirements of the ESEF Regulation, by reference to
Capital Markets Rule 5.55.6.
The Principal authorised to sign on behalf of KPMG on the audit resulting in this independent auditors’
report is Thane Micallef.
KPMG 24 March 2026
Registered Auditors
KPMG, a Maltese civil partnershipand a member firm of the KPMG global The firm is registered as a A list of partners and directors of
organisation of independent member firms affiliated with KPMG partnership of Certified Public the firm is available at Portico
International Limited, a private English company limited guarantee.Accountants in terms of the Building, Marina Street, Pietà,
Accountancy Profession Act PTA9044, Malta.