With effect from 1st May 2026, Mapfre MSV Life (MMSV) has adjusted the level of Market Value Reduction (MVR) on With Profits surrender transactions.
The application of a Market Value Reduction (MVR) became necessary in August 2022 following the sharp decline in valuations across mainstream asset classes during the first half of the year and the heightened uncertainty prevailing in financial markets.
Since then, equity markets have generally recovered, although gains were largely concentrated in a relatively small number of large US stocks. These stocks subsequently experienced a correction towards the end of 2024 and the beginning of 2025.
Despite ongoing volatility arising from uncertainty surrounding global trade tariffs, 2025 was a positive year overall, with traditional asset classes delivering positive returns and contributing to improved market performance.
The beginning of 2026 introduced additional risks amid escalating geopolitical tensions in the Middle East, resulting in higher oil prices and renewed concerns about inflationary pressures. At the same time, bond yields remained well above their 2022 levels, as central banks continued to focus on containing inflation rather than implementing significant interest-rate cuts. Lower interest rates would typically be expected to support equity markets through reduced financing costs and improved investor sentiment; however, the prospect of rates remaining higher for longer could potentially weaken the equity market outlook going forward.
Mapfre MSV Life has regularly reviewed market performance affecting the MMSV With Profits (WP) Fund to monitor the ongoing appropriateness of MVRs. Adjustments were made in August 2023 following a market upturn, and again in April and October 2024 given the further improvements in the returns on the WP Fund and relatively stable volatility outlook at that time. A further review took pace in April 2025. More recently the fund performance has remained positive and MMSV has, once again, adjusted the level of MVR applied.
- Comprehensive Life Plans (Regular Premium) remain MVR free.
- All Contracts that have been in force for less than four years are MVR free.
- Single Premium Plans and top-up contributions, which have been in force for at least 10 years remain MVR free. The MVR rate for Single Premium contracts with surrender duration of 8 years has been reduced.
- Comprehensive Flexible Plans and With-profits Pension Plans which have been in force for at least 9 years are now MVR free.
- MVRs on regular premium contracts in force between 4 and eight years are unchanged.
The MMSV With Profits Fund is invested in a diversified range of assets including mainstream equities, fixed interest and property. In 2025, mainstream asset classes in investment portfolios, namely fixed income and equities, contributed positively towards investment returns.
During the first two quarters of 2026, financial markets remained volatile as investors assessed the implications of geopolitical developments, elevated energy prices, persistent inflationary pressures and the outlook for monetary policy. While corporate earnings generally remained resilient, market sentiment was periodically affected by concerns that inflation could prove more persistent than previously anticipated, delaying any meaningful easing in monetary policy.
Looking ahead, uncertainty remains elevated. The combination of geopolitical tensions, higher energy prices, persistent inflationary pressures and relatively restrictive monetary policy could continue to weigh on investor sentiment and economic activity. Furthermore, bond yields remain at levels that may challenge equity valuations, particularly if expectations for interest-rate cuts continue to be pushed back. While markets may continue to find support from resilient economic fundamentals, the balance of risks remains tilted to the downside, warranting a cautious approach to the outlook for the remainder of 2026.
We will continue to monitor financial markets and their impact on the MMSV With Profits Fund and will update MVR accordingly to maintain fairness between the policyholders who leave their policy in force until maturity and those who choose to surrender their policy prior to the policy maturity date.
Elvira Lopez de Lara Merida
Chief Executive Officer