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Fitch: Central America Insurance Sector Outlook Remains Stable
[December 17, 2014]

Fitch: Central America Insurance Sector Outlook Remains Stable


Fitch Ratings says the Central American insurance sector's outlook remains stable for 2015. The rating outlook for Central America insurance companies is also stable for 2015; and it is highly likely the ratings will be affirmed.

Fitch expects that capitalization, performance and liquidity of Central American insurance companies to remain supportive of the existing ratings in 2015. However, significant changes in the companies' risk profiles or in the support assumed in some cases could give rise to modifications in the ratings.

As a result of stable or higher projected economic growth rates for most countries, gradual strengthening in underwriting conditions in some important insurance lines, and ample reinsurance protection favored by continuous soft pricing conditions, Fitch assigned a stable outlook to all the insurance markets in the region.

According to Fitch, Central America will remain as the seventh-largest insurance market in Latin America. Its credit profile remains solid compared with other insurance markets in the region.

Fitch anticipates premiums in Central America will experience a nominal growth in U.S. dollars of 10.2% in 2014 and 9.5% in 2015, lower than 11% in 2013, which was influenced by stronger growth rates in Guatemala and Costa Rica than its projections for the next two years. Costa Rica will remain as the largest and most penetrated market of the region (40% of total premiums written and 2% of the country's GDP), while Nicaragua will remain as the fastest growing market in the region.

Fitch believes that despite competitive pressures, most insurance marets will move to more conservative underwriting policies and pricing techniques to stop the increase in net loss ratios and improve technical performance.



Fitch believes the region will continue to show a reasonable operating leverage ratio, based on an adequate capital position and a conservative policy for profits reinvestment in most markets.

The full report, '2015 Outlook: Central America Insurance Sector' is available at www.fitchratings.com.


Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research: 2015 Outlook: Central America Insurance

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=837688

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.


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