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Fitch affirms ratings of 2 Colombian insurers

Fitch Ratings on Dec. 12 affirmed the national financial strength ratings of Liberty Seguros SA and La Previsora SA Compania de Seguros at AAA(col), with a stable outlook.

Liberty Seguros' rating considers its loss ratios that are favorable compared to the average general insurance sector and the proven track record of its controlling group, Liberty Mutual Group Inc., in terms of equity support and the backing of its reinsurance program, Fitch said. The rating also recognizes a partial benefit of support from Liberty Mutual as Fitch views Liberty Seguros as an important subsidiary for the group.

Fitch noted that Liberty Seguros could still improve its efficiency and leverage ratios, which remain above the market average.

Meanwhile, the rating of La Previsora reflects its intrinsic financial strength due to strong capital levels as well as adequate reserve coverage and liquidity ratios. While the company has a good history of internal generation capacity, it can still improve its technical performance, Fitch noted. This can be done through good market positioning, particularly by diversifying its premium portfolio through the dilution of the weight of regulated businesses in its premium portfolio, Fitch noted.

La Previsora's rating also considers the benefit of support it would receive from the Colombian government, which is its major indirect shareholder.