Seguros Generales Suramericana S.A.

The negative outlook on Sura Generales for the next 12-24 months reflects the outlook on Colombia. The rating on the insurer will move in tandem with the foreign currency sovereign rating because we don't think the Suramericana group can withstand a sovereign default scenario. We could downgrade the insurer if we downgrade Colombia. We don't expect to downgrade the company based on changes in the Suramericana group's credit fundamentals because its potential GCP is currently two notches above the ratings on the insurer. We also don't anticipate downgrading the insurer if we downgrade its ultimate parent, Grupo de Inversiones Suramericana S.A. (GIS; BB+/Negative/--), to a level below that on Sura Generales because we think Suramericana's creditworthiness is fairly isolated from

... S.A. (Sura Generales) continues to benefit from the Suramericana group's support. We view the insurer as a core subsidiary of the Suramericana group. As a result, we equalize our rating on the insurer with the group credit profile (GCP), which is currently '##+'. The foreign currency rating on Colombia (##+/Negative/B) limits the GCP because we don't believe the group could withstand a sovereign default scenario, as it still has large exposure to Colombia in the form of assets and premiums. We expect Suramericana's intrinsic credit quality to remain stable in the next few years. The group has a '###' potential GCP--our measure of creditworthiness before accounting for sovereign influence--reflecting a strong competitive position that comes from its brand recognition, well-diversified income sources, and satisfactory profitability. The group has reasonable capital adequacy prospects thanks to good internal capital generation and moderate...

Full Report