Fitch Affirms Maxseguros EPM Ltd’s IFS Rating at ‘BBB’; Outlook Stable [Manufacturing Close – Up]
Proquest LLC |
Fitch Ratings has affirmed
The Rating Outlook is Stable.
The rating reflects the strategic importance of Maxseguros EPM for Empresas Publicas de Medellin E.S.P. EPM (the parent). This captive reinsurance company is a core subsidiary in charge of managing the risks and structuring the insurance coverage for
Maxseguros EPM's rating is highly tied to the rating of its shareholder, Empresas Publicas de Medellin E.S.P. - EPM. Changes in the rating of the former could result in changes to Maxseguros' rating.
Empresas Publicas de
In 2011, Maxseguros EPM requested (from regulators) to change its operating licence to Class 2 from Class 1. This request was accepted and the new status reassured not only subsidiaries controlled by EPM but also a limited portion of business from risks where EPM doesn't have the majority interest. This is the case of 'Pescadero Ituango' where EPM is an important shareholder and it is in charge of developing the project by a 50 year BOOMT's(Build, Own, Operate, Maintain and Transfer) concession. According to information provided by the management, Maxseguros will remain focused on providing reinsurance protection to EPM's own and related businesses; given that there is no intention to accept risk from non-related interests.
As of
The quality of the investment portfolio is good. The company places its deposits in financial institutions with good credit quality and also has marketable investments in funds concentrated in fixed income investments. The reinsurer doesn't have exposures in fixed assets, reflected in strong liquidity ratios, 77 times (x) as of
Maxseguros EPM reports adequate capital levels, which is also reflected in its leverage ratios (1.8x as of
On
Additional information is available at fitchratings.com.
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