FIATC Mutua de Seguros y Reaseguros

The stable outlook on FIATC reflects our expectation that the company will continue to benefit from its leading position in Catalonia and resilient capital adequacy over the next 12-24 months. The outlook also incorporates our expectation that FIATC's mutual funds will increase at least in line with its capital requirements. We could lower the ratings over the next two years if FIATC's earnings and capital deteriorated significantly, underperforming the Spanish market and thereby weakening FIATC's competitiveness or financial stability. We could raise the ratings on FIATC over the next two years if the company's capital were to increase and stabilize at an excellent level. We could also upgrade the company if it demonstrates a track record of profitable earnings that

...We expect FIATC will maintain its leading position as a mutual insurer in Catalonia, with a strong franchise in health care and the retirement services business. It has developed a well-balanced insurance portfolio that includes health, property, motor, and life. Life business has been the main growth driver, mostly thanks to a short-term single-premium savings product called InverCapital. FIATC is also developing its health segment, reflected in premium growth of about 10% in five years. In 2018, FIATC's property and casualty (P/C) operations represented 42% of premiums, followed by life (33%), and health (25%). Despite the company's strong presence in Catalonia, overall market share at a national level is small at about 1%, while earnings generation remains relatively modest, even taking the company's mutual status into account. We assume FIATC's solid capital adequacy under the Solvency II framework and our risk-based capital model will persist over 2019-2021. FIATC displays a solid...

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