Fitch: Colombia’s Insurance Market Continues To Be Attractive To New Participants
Bogotá, Colombia–(Business WIre)– Fitch Ratings has announced that its Sector and Rating Outlooks for the Colombian insurance industry are currently stable, and that there is a high likelihood Fitch will affirm the ratings of most Colombian insurance companies in 2016, despite the challenging economic environment that will moderate growth projections. Regulatory changes in reserves may temporarily affect operating performance and leverage ratios. The industry’s financial strength will remain adequate.
Fitch expects modest premium growth of 6% – 8% for 2016. Profitability will be challenging due to a moderate growth scenario, highly competitive environment, and the impact of the new reserves regulations. Net income will be affected by high volatility in capital markets.
“Fitch believes Colombia’s economy is more resilient compared with other Latin American markets.”
Fitch says that it believes the industry’s capital and reserves position will continue to strengthen through higher technical reserves, which are calculated under international standards and more robust methodologies.
The insurance market in Colombia continues to be attractive to new participants. Fitch believes Colombia’s economy is more resilient compared with other Latin American markets. The implementation of infrastructure projects and market size determine the market’s growth potential.
Fitch’s determinations and resultant publication is based on public information disclosed by Colombia’s Financial Superintendency and also from data owned by the rating agency regarding the sector; the information analyzes the perspectives regarding growth, profitability, capitalization, given ratings and regulatory changes.
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