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S&P upgrades J. Malucelli insurance units

S&P Global Ratings on March 16 raised the issuer credit ratings of J. Malucelli Seguradora SA and J. Malucelli Resseguradora SA to brAA- from brA+ with a stable outlook.

In S&P's view, both J. Malucelli units are highly strategic for parent Paraná Banco SA. The insurance group is integrated into the bank's business and strategy as an important source of diversification, since it is responsible for about 35% of the bank's net income, the rating agency said.

J. Malucelli's credit quality would also not be immediately impacted in case the credit quality of its controller deteriorates, S&P noted.

The ratings of the J. Malucelli units reflect their focus on a single business line, their operating performance in line with their peers and their high capitalization. These factors are partially offset by the concentration of J. Malucelli's portfolio of investments in speculative securities related to investments in Brazilian government securities and by the potential volatility of profits related to the concentration of its guarantee insurance operations.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.