OREANDA-NEWS. Fitch Ratings has assigned Seguros e Inversiones, S.A. y Filial (SISA) an Insurer Financial Strength rating of 'BB'. The Rating Outlook is Stable.

KEY RATING DRIVERS

SISA's rating is derived from the expected support it receives from parent Citigroup Inc. (Citi - Issuer Default Rating 'A'; Outlook Stable by Fitch). Despite listed as one of the many subsidiaries in Latin America for sale, Fitch believes support from Citi will be forthcoming until such transactions take place. SISA's current stand-alone financial profile is weaker than the rating category indicates; however, due to the partial attribution approach, SISA's rating considers Citi's ability to provide support if needed.

On a consolidated basis as of year-end 2014, Seguros e Inversiones, S.A. y Filial is the largest insurance group in the Salvadoran market, with 22% market share measured by total gross written premiums (GWP). This position comes from its two operations in El Salvador; SISA Vida (life insurance) which holds 16% of the market share and Seguros e Inversiones (property insurance) which holds 6% of the market share.

The insurer has a long-term track record of favorable operating results due to the adequate combined ratios which compares favorably to the industry and its peers. This good performance reflects the positive attributes of the underwritten risks and business mix, since 49% of the production is concentrated in Banc-assurance and the insurance Pension of Disability and Survival.

SISA has shown a growing trend in leverage ratios but is still within appropriate levels and in line with the rating category. At year-end 2014, net earned premiums to equity ratio stood at 1.4x and liability-to-equity ratio at 1.1x.

Similar to other insurance companies in the region and in part due to local regulatory requirements, SISA'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 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, 2.1x at year-end 2014.

SISA'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 1.9% of the equity in a catastrophic event.

RATING SENSITIVITIES

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

Upgrade Factors: SISA is already rated at the country ceiling, hence no upside potential at the moment.

Fitch assigns and affirms the following Ratings:

Seguros e Inversiones, S.A. y Filial
--Insurer Financial Strength 'BB'.
--Affirms National Insurer Financial Strength 'AAA'(slv)

The Rating Outlook is Stable.