S&P Global Ratings on Jan. 23 affirmed the global- and national-scale ratings of Sul América Companhia Nacional de Seguros SA and Sul América SA at BB/brAA- and B+/brBBB+, respectively. The outlook remains negative.

The affirmation of Sul América Companhia Nacional de Seguros reflects its strong brand recognition, business diversification and an operational performance in line with its peers, S&P said.

However, also like its peers, the company's investment portfolio remains concentrated in speculative grade securities due to its exposure to Brazilian sovereign bonds.

The rating agency expects the insurer to maintain adequate profitability levels, but does not expect improvement in the company's risk assessment position over the next two years, as this would require a large change in the composition of its investment portfolio.

"Although we expect the [country's] economic slowdown to continue pressuring Sul América's technical results, we believe that the company will maintain its conservative subscription standards and its profitability focus in order to sustain adequate financial results," S&P said.

Sul América SA's rating is two notches lower than the group's core operating companies due to the holding company's structural subordination, which depends on dividends from its operating subsidiaries to honor its financial obligations, S&P noted.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.