FIATC Mutua de Seguros y Reaseguros

The stable outlook on FIATC reflects our expectations that the company will maintain its solid position in Catalonia and resilient capital adequacy over the next 18-24 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 capital position becomes volatile and declines over a prolonged period, contrary to our expectations, or if its operating performance deteriorates below our expectations. Even though we see limited ratings upside over the next two years, we could take a positive rating action if FIATC: Reduces the share of higher-risk fixed-income assets; and Demonstrates substantial business growth that exceeds our base case

...We expect FIATC Mutua de Seguros y Reaseguros (FIATC) will maintain its favorable position as a mutual insurer in the Spanish region of Catalonia. FIATC's size and market share at the national level remain small, at about 1.12% in 2023. Nevertheless, the company benefits from broad diversification across several business lines, including health, property, motor, and life. FIATC is developing its health segment. The company owns a hospital and retirement residencies, which enable it to provide tailored health solutions to its policyholders. We expect FIATC's financial strength will prove resilient, mainly supported by its positive earnings and members' direct contributions to mutual funds. FIATC's capital adequacy was at the 99.99% confidence level in 2023, according to our risk-based capital model. We assume it will remain at this level over 2024-2026, despite the company's growth ambitions. We expect the increase in capital requirements, stemming from volatile financial markets and new...

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