Fitch Ratings on Feb. 15 lowered its national scale financial strength rating on Colombia-based QBE Seguros SA to A(col) from A+(col), with a stable outlook.

The downgrade reflects the company's deteriorating financial results, including losses recorded as of December 2017 that generated negative pressure on its equity base.

However, Fitch noted that QBE Seguros' decision to exit the compulsory traffic accident insurance business may benefit the company's profitability in the medium term, although other challenges still remain for the insurer to bring its capitalization levels in line with the market average.

The rating on QBE Seguros also takes into account its status as an important subsidiary for Australia-based parent company QBE Insurance Group Ltd. QBE Seguros' liquidity could face pressure in 2018 and 2019, but the insurer can rely on support from the parent company, Fitch noted.

The rating agency could downgrade QBE Seguros further if, among other things, the company's capitalization levels deteriorate.