Seguros Generales Suramericana S.A.

The negative outlook on Seguros Generales Suramericana reflects that on Colombia, which in turn indicates our view of downside risks to Colombia's fiscal and external metrics for the next 18 months. We could lower the sovereign ratings if the external shocks undermine GDP growth prospects, contributing to worsening public finances, or pose further risks to Colombia's external liquidity. A downgrade of Colombia will have the same effect on ratings on the insurer. We could revise the outlook on Seguros Generales Suramericana to stable if we were to take the same action on the sovereign. This could occur if timely and adequate policy measures successfully stabilize the economy, sustain GDP growth prospects, limit the increase in the general government's net debt

... continues benefiting from Suramericana group's support. We view the insurance company as core to the Suramericana group (Suramericana). As result, we equalize ratings on the subsidiary to the group credit profile (GCP), which is currently at '###-'. We limit the GCP at our foreign currency rating on Colombia (###-/Negative/A-3) because we don't believe the group could withstand a sovereign default scenario, given its still large exposure to Colombia in the form of assets and premiums. We believe Suramericana group will continue benefiting from strong competitiveness. This is thanks to brand recognition, well-diversified income sources, and expected satisfactory earnings once lockdowns end. Capital adequacy is reasonable. We expect the group and its core subsidiaries to continue operating with total adjusted capital (TAC) at slightly below our benchmark for '###' ratings in 2021-2022. Lockdowns because of the pandemic will pressure margins...

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