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Fitch revises outlook on 3 Banco Nación insurance units

Fitch Ratings on May 28 revised the outlook on Argentine insurers Nación Seguros SA, Nación Seguros de Retiro SA and Nación Reaseguros SA to stable from positive.

The action follows the revision of the country's sovereign outlook to stable earlier in May, and the resulting effect on parent company Banco de la Nación Argentina, whose operations are guaranteed by the government.

At the same time, Fitch affirmed the three companies' insurer financial strength ratings at B.

The ratings on the insurers follow a group rating approach since Fitch considers them to be core subsidiaries for state-run Banco de la Nación.

"The revision of the outlook on Argentina reflects macroeconomic policy frictions and political headwinds that have intensified beyond Fitch's prior expectations, highlighting risks surrounding the country's gradual policy adjustment process," the rating agency said.

It added that policy adjustments should progress "despite recent political noise and market volatility, gradually reducing still-high inflation and fiscal imbalances and supporting a stronger and more stable growth outlook."

Argentina's central bank has raised its key interest rate to a record 40% to stave off a rapid depreciation of the peso.