S&P Global Ratings on May 2 raised its national-scalelong-term counterparty credit and financial strength ratings to mxAA+ from mxAAand affirmed the mxA-1+ short-term rating on Quálitas Compañía de Seguros SA de CV.
S&P also raised its global-scale long-term counterpartycredit rating on QuálitasControladora SAB de CV to BB+ from BB as well as the counterpartycredit and financial strength ratings on U.S.-based to BBB- fromBB-. The outlook on all of the companies is stable.
The ratings action on the entities follows the revision ofS&P's assessment on the importance of enterprise risk management to Quálitasto "low" from "high" importance. S&P believes thecompany is not exposed to complex risks that could cause a significant loss ofcapital and earnings in a short period of time or that are highly uncertain orlong-term in nature.
Quálitas' ratings remain supported by its strong brandrecognition, leadership position in the Mexican auto insurance market andadequate operating performance, S&P said. However, ratings factors arelimited by the company's "slightly redundant" current risk-basedcapital as well as uncertainties regarding the company's capitalization levelsafter the implementation of the local regulator's Solvency II-type capitalmodel.
Still, the ratings reflect S&P's view of Quálitas'"satisfactory" business risk profile and "lower adequate"financial risk profile.
Meanwhile, Qualitas Insurance's ratings reflect S&P'sview that it is a "highly strategic" subsidiary for Quálitas, due toa strong level of support and commitment and its high level of integration interms of business strategy and enterprise risk management.
S&P Ratings andS&P Global Market Intelligence are owned by S&P Global Inc.