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Fitch revises outlook on Colombia's La Previsora to negative

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Fitch revises outlook on Colombia's La Previsora to negative

Fitch Ratings on Dec. 7 affirmed La Previsora SA Compania de Seguros' national scale financial strength rating of AAA(col), but revised the outlook to negative from stable.

The outlook revision reflects the pressure that the loss ratio has exerted on the total profitability of the company, including in its main lines of business which are mandatory insurance SOAT and automobiles, even if discounting for the extraordinary effects of accounting adjustments and reservations. The company has implemented a series of measures in search of profitability in these lines, which will be key in reversing the deterioration that places it below other peers with a similar risk profile, Fitch said.

Meanwhile, the insurer's rating reflects its intrinsic financial strength derived from solid capital levels, low levels of leverage, adequate reserve coverage and adequate liquidity ratios. However, the insurer still has to build up its technical performance, which will benefit from a good positioning in the market, in which it also has opportunities to diversify its premium portfolio.