Fitch Affirms Seguros Inbursa’s Ratings at ‘BBB’ and ‘AAA(mex)’; Outlook Stable

SAN SALVADOR, El Salvador & NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed Seguros Inbursa, S.A.'s (Inbursa) local currency Insurer Financial Strength (IFS) rating at 'BBB' and the national scale IFS at 'AAA(mex)'. The Outlook for both ratings remains Stable.

Seguros Inbursa's ratings are based primarily on its adequate technical and catastrophic reserves coverage, and its well-structured reinsurance program that translates into an ample underwriting capacity and a low equity exposure to claim losses.

Inbursa has a good business profile in its core Mexican market as a multi-line insurer and a specialist underwriter of Pemex P&C policy, in which the company retains 5% of the risk. The company's profile also benefits from the strong brand recognition of its Mexican domiciled parent and financial group to which it belongs.

As expected, Inbursa maintained an operating loss in 2011 and a combined ratio greater than 100%, despite modest loss ratio decreases for certain lines of business and a significant retained premiums increase, mainly due to the renewal in 2011 of Pemex's P&C policy. This renewal brings the company volatility of results and differences in Key Indicators over the previous year.

The underwriting loss is still offset by net investment earnings contribution (16% of written premiums in 2011) although lower than the 19.6% achieved in 2010 (excluding unrealized gains), allowing the company to produced a net profit of 842 millions of Mexican Pesos. Inbursa has a conservative investment portfolio, which comprises mainly high quality bonds and some variable income investments, mainly related parties' stocks.

The company's medium-term general business strategy is still focused on diversifying its premiums portfolio in order to reduce its concentration risks, its operating volatility and its dependency on the main account's performance. Fitch expects a similar combined ratio and net investment yield in 2012.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Insurance Rating Methodology' (Sept. 22, 2011).

Applicable Criteria and Related Research:

Insurance Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=651018

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Fitch Ratings
Primary AnalystEduardo Recinos, +503-2516-6606
Senior Director
Fitch, Inc.
San Salvador, El Salvador
or
Secondary AnalystMilena Carrizosa, +57-1-326-9999
Director
or
Committee ChairpersonFranklin Santarelli, +1-212-908-0739
Managing Director
or
Media Relations:Brian Bertsch, +1-212-908-0549
Email: [email protected]

Source: Fitch Ratings