Dear Investors:

We are pleased to share with you, for the second consecutive year, Grupo Peña Verde’s Annual Report, with which we seek to let you know first-hand the different impacts that the Group has had on our stakeholders and our environment derived from the operational, financial, and strategic efforts we carried out in 2021.

First of all, we would like to highlight that, despite the challenging backdrop we continued to weather during a large part of the last year, resulting from the lingering effects of the health contingency, we achieved a positive performance, demonstrating once again: together we deliver results!

In this context, written premiums reached a new all-time high of Ps. 11,962.6 million in 2021, an annual growth of 17.0%, which was driven by the contribution of our insurance and reinsurance divisions, with Reaseguradora Patria and General de Seguros posting increases of 20.4% and 19.4%, respectively.

This, together with the solid operating performance, excluding the booking of technical reserves, and our equity investments, led to a net income of Ps. 429.5 million in 2021, which compares favorably with the Ps. 195.5 million net loss recorded in 2020.

Similarly, reflecting the Company’s sound financial position, the rating agencies Fitch Ratings, HR Ratings, and AM Best issued positive evaluations of the Group’s credit quality. In this regard:

  • Fitch Ratings raised the credit rating of Peña Verde, S.A.B. twice in 2021, from BBB- to BBB+, and ratified its ratings for Reaseguradora Patria, General de Seguros, and General de Salud;
  • HR Ratings assigned Peña Verde, S.A.B. a long-term rating of HR AAA and a short-term rating of HR+1, the highest scale; and,
  • AM Best, the largest global rating agency specialized in the insurance sector, ratified the ratings of Peña Verde, S.A.B. and its subsidiaries.

We are convinced that these positive results attest to the effectiveness of the innovation and transformation strategy behind our business processes, our technological platform, and our organizational culture, driven by the strong determination to maximize the Group’s shared value generation for the benefit of our customers, employees, investors, and the communities where we operate.

As part of our efforts to bolster our organizational culture, we carried out several activities throughout the year, including: i) workshops to promote gender equality and foster the Group’s ethical and cultural values; and ii) the execution of a sustainability assessment.

In this regard, reflecting our commitment to establish diversity and inclusion as a key distinctive principle, we were recognized by 5050 Women on Board and Women Corporate Directors for being among Mexican publicly traded companies with the highest participation of independent female directors on its Board.

Furthermore, in line with our social commitment, we held for the sixth consecutive year the Peña Verde Day, during which Grupo Peña Verde and several volunteers collaborated with TECHO (an organization dedicated to help millions of people overcome poverty) in the construction of three houses with a unit value of Ps. 204 thousand (donated by the Group). Likewise, together with our employees, who made their contribution in a voluntary and direct manner, we donated over Ps. 191 thousand to TECHO for the installation of 10 water supply systems.

At the same time, through capability and performance evaluations, talent profile gap analysis and results reports, as well as individual feedback sessions with each applicant for job promotions, we continue to foster the professional development of our employees, who are undoubtedly our most important asset.

This is evidenced by the appointments of Mr. Francisco Martínez Cillero as CEO of Reaseguradora Patria and Mr. Fernando Álvarez del Río as CEO of the Insurance Division; Francisco has worked in different subsidiaries of Peña Verde since the beginning of his professional career, 10 years ago; and Fernando has served as CEO of General de Salud for the past 4 years.

Regarding our technological and business transformation, we continued to make progress in the digitalization of our operations, in an effort to remain at the forefront, generate efficiencies and, above all, elevate the quality of our service. For example, we launched “Tito”, an artificial intelligence- based virtual assistant that will handle basic queries and help the IT and Security department to open requests.

We are also proud to highlight that General de Salud was recognized with the Celent Model Insurer 2021 award in the Digital and Emerging Technologies category for the development of the AMAE Health Insurance, the first 100% digital health insurance product in Mexico that we developed to meet the needs of people suffering from type 2 diabetes mellitus, following one of our cultural pillars: The client, my priority.

Through the Insurance Division, we also created the first Solutions Center known as “Seguro Que Sí”, with which we seek to change commercially in order to make it easier for our insurance clients to find the solutions they are looking for through a unique experience.

Another relevant development was that, in line with the Group’s value maximization strategy, we completed the delisting of General de Seguros’ stock from the stock exchange. With this and our transformation and growth strategy, we are confident that Peña Verde’s stock will more accurately reflect the Group’s operational and financial strength.

Before concluding, it is important to note that, although the effects of the pandemic have lessened, we will continue to navigate with caution given the prevailing complex backdrop in Mexico, marked by high inflation, higher interest rates, and slowing economic growth according to Banxico’s most recent economic expectations survey. Nevertheless, we believe that the Mexican insurance sector will remain resilient against this scenario.

As for the uncertainty arising from the escalating conflict in Ukraine, an unfortunate fact that we hope will be brought to a speedy resolution for it is civilians who bear the brunt of the consequences, we have already factored this situation into our investment strategy in order to continue protecting our clients’ assets to the best of our ability.

Wrapping up, for 2022 we will continue to put the well-being of our clients and employees first, who just in March 2022 began to return to our workplaces through a flexible hybrid plan developed by our Business Support and Transformation team, geared towards the achievement of our objectives. This approach supports a blend of in-office work, on a scheduled and occasional basis while following the proper health protocols, and work from home on given days. We are convinced that, with the trust of our investors and the support and talent of our team, we will continue to advance steadily in our path of growth, transformation, and long-term value generation, as we All Build Peña Verde.

Enrique Julio Zorrilla Fullaondo
Chairman of Peña Verde

Manuel S. Escobedo Conover
Chief Executive Officer of Peña Verde