Cardif Colombia Seguros Generales S.A.

Cardif Colombia´ s profitability will strength in the next two years. We expect return on equity (ROE) of 18%-20%, given premiums growth of 18%-20%, because of improving economy and solid performance of commercial partners, contained commission rates and administrative costs, and better investment results. Strategic subsidiary of the parent. We continue viewing Cardif Colombia as a strategically important subsidiary of BNP Paribas S.A. (A+/Stable/A-1). Although the current rating on Cardif Colombia doesn't benefit from additional notches of group support, we consider that the group would have the ability and willingness to provide support to its Colombian subsidiary with capital injections and liquidity if needed. The stable outlook on Cardif Colombia reflects our expectation that the insurer will retain sufficient capital and liquidity

...High capitalization and liquidity allow us to rate the insurer above the foreign currency rating on Colombia. We expect Cardif Colombia Seguros Generales S.A.'s (Cardif Colombia) good capital and liquidity buffers to continue allowing it to withstand a sovereign default scenario on the country's foreign currency obligations. This enables us to rate the insurer above our foreign currency rating on Colombia (##+/Stable/B) up to our sovereign local currency rating (###-/Stable/A-3). We expect Cardif Colombia will maintain its solid intrinsic creditworthiness in the next few years, with a '###' stand-alone credit profile (SACP). The company benefits from a robust competitive position across its major business lines, thanks to its successful bancassurance-like model and ability to build value for its major commercial partners, and favorable profitability prospects, despite a drop in profitability last year along with that of the industry. In addition, we expect the company¦s capitalization to...

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