OREANDA-NEWS. Fitch Ratings has assigned an Insurer Financial Strength (IFS) rating of 'BB' to SISA Vida, S.A. Seguros de Personas. The Rating Outlook is Stable.

KEY RATING DRIVERS

SISA Vida's rating is derived from the expected support from its parent: Citigroup Inc. (Citi; Issuer Default Rating of 'A', Outlook Stable). Despite being listed as one of the many subsidiaries in Latin America for sale, in Fitch's view support from Citi will be forthcoming until such transaction takes place. The current stand-alone financial profile of SISA Vida is weaker than the rating achieved, but due to the partial attribution approach, SISA Vida's rating considers Citi's ability to provide support if needed.

SISA Vida is the largest player in the Salvadorian insurance sector, with a gross written premium (GWP) market share of 16% at year-end 2014. The company is an affiliate of Seguros e Inversiones, S.A. (SISA) and on a consolidated basis (life and non-life insurance), holds 22.1% of those markets' total GWP.

The insurer has a long-term track record of good operating results with combined ratios that compare favorably to the industry and its peers. This performance reflects the conservative underwriting policies that have led to low and stable net loss ratios as well as high efficiency levels.

SISA Vida's capital quality and leverage ratios are in line with the rating category. Due to the companies' adequate internal generation of capital, the company has been able to maintain low and stable leverage ratios. At year-end 2014, net earned premiums-to-equity stood at 1.59x and liability-to-equity at 1.14x.

Similar to other insurance companies in the region and in part due to local regulatory requirements, SISA Vida's investment portfolio is comprised of sovereign securities and deposits in domestic banks, all of which are rated non-investment grade. Favorably, investment policies call for investment in traditional senior unsecured debt. Therefore, the company has no exposure to variable-rate income securities or securitizations. The liquid assets reserve coverage is ample and stands at the upper level of the local market and its peers in the region, 2.14x at year-end 2014.

SISA Vida's security program is considered adequate to limit the insurer's risks. The reinsurance pool is composed of specialized reinsurers with high credit quality. The maximum exposure in the current program does not exceed 0.3% of the equity in a catastrophic event.

RATING SENSITIVITIES

Downgrade Factor: The rating of SISA Vida could change if the operations are acquired by investors with a different credit profile than the current shareholder. To determine risk to the rating Fitch will evaluate the intrinsic financial strength of the entity as a potential support to its new shareholders.

Upgrade Factor: SISA Vida is already rated at the country ceiling; hence, there is no upside potential at the moment.

Fitch has taken the following rating actions:

SISA Vida, S.A. Seguros de Personas:

--Insurer Financial Strength rating of 'BB'; with a Stable Outlook assigned;
--National Insurer Financial Strength rating affirmed at 'AAA(slv)'.