April 26, 2016 / 5:46 PM / 2 years ago

Fitch Affirms Seguros Inbursa's National and International IFS Ratings; Outlook Stable

(The following statement was released by the rating agency) MONTERREY, April 26 (Fitch) Fitch Ratings has affirmed Seguros Inbursa, S.A., Grupo Financiero Inbursa's local currency Insurer Financial Strength (IFS) rating at 'BBB+' and affirmed the National Scale IFS rating at 'AAA(mex)'. The Outlook for both ratings remains Stable. KEY RATING DRIVERS The rating of Seguros Inbursa, S.A. (Seguros Inbursa) is based on legal explicit support given by its holding group Grupo Financiero Inbursa (GFInbursa), in which, according to Financial Groups Law, the holding group, if required, will grant unlimited support for its subsidiaries' losses. Fitch considers GFInbursa's credit quality to be similar to its main subsidiary - Banco Inbursa, S.A., Institucion de Banca Multiple (BInbursa), which is rating 'BBB+'/Stable Outlook by Fitch The affirmation was also based on the importance of the insurance company within the financial group, considering that Seguros Inbursa represents 18% and 7% of GFInbursa's total assets and the group's income, respectively. It was also based on the high level of management and operational integration and on the fact that the subsidiary operates in same jurisdiction as the parent. Seguros Inbursa is the eighth-largest insurer in Mexico, with a market share of 5% in terms of premiums written as of September 2015. As of December 2015, Seguros Inbursa's equity/assets ratio was similar to the sector's average of 13%, and it exceeded the local regulation minimum capital requirement by 40%. This implies Seguros Inbursa has sufficient equity in addition to technical reserves to meet its obligations to policyholders in the event of unexpected deviations in various risks. Also, the company's operating leverage ratio has remained stable, with premiums/equity of 5.69x, which is below the sector average of 7.78x. Seguros Inbursa improved its operating profitability in 2015, as measured by its Combined Ratio of 109% (December 2014: 110%), and, even though the claims ratio was maintained (77%), the financial result prevented the ratio from decreasing. The company's stringent technical and catastrophy reserving policies, combined with the premium distribution and retention levels of its premium portfolio, led to ample coverage of adjusted technical reserves over retained risks of 3.11x as of December 2015. This is similar to the sector average of 3.12x. Seguros Inbursa's extensive reinsurance protection leads the company's equity to exposures to less than 0.6% of equity for simple or catastrophic events. RATING SENSITIVITIES Seguros Inbursa's rating is aligned with GFInbursa's financial profile, whose credit quality is considered by Fitch as similar to its core operative subsidiary, BInbursa, based on the legal explicit support given by GFInbursa through their Unique Responsibilities Agreement. FULL LIST OF RATING ACTIONS Seguros Inbursa, S.A., Grupo Financiero Inbursa --Insurer Financial Strength affirmed at 'BBB+'; --National Insurance Financial Strength affirmed at 'AAA(mex)'. The Rating Outlook is Stable. Contact: Primary Analyst Eugenia Martinez Associate Director +5281 8399 9155 Fitch Ratings Mexico Prol. Alfonso Reyes 2612, Piso 8, Monterrey NL, 64920 Secondary Analyst Rosa Elena Turrubiartes Director +5281 8399 9100 ext.1516 Committee Chairperson Julie Burke Managing Director +1 312 368 3158 Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email: elizabeth.fogerty@fitchratings.com. Additional information is available on www.fitchratings.com In applying Fitch's insurance criteria with respect to the impact of ownership on Seguros Inbursa's ratings, Fitch considered how the ratings could theoretically be impacted under Fitch's bank support criteria. Fitch's insurance criteria with respect to ownership is principles-based, and the noted bank criteria was used to help inform Fitch's judgment in applying those principles. Applicable Criteria Global Bank Rating Criteria (pub. 20 Mar 2015) here Insurance Rating Methodology (pub. 16 Sep 2015) here Metodología de Calificación Global de Bancos (pub. 29 May 2015) here Metodología de Calificación de Seguros (pub. 13 Oct 2015) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here _id=1003311 Solicitation Status here Endorsement Policy here ail=31 ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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