OREANDA-NEWS. The outlook for life insurance companies in Chile is stable, both in terms of ratings and operational framework, according to a new Fitch Ratings report.

Fitch believes that the life insurance industry in Chile has been resilient to economic weakness, reflecting a mature stage, and has benefited from favorable social development and social mobility environment in the recent years. Gross written premiums forecast for 2016 will be significantly smaller than 2015, mainly driven by the expected lower dynamism of annuities business compared with an overstimulated 2015. Profitability would continue to face volatility and wide dispersion of returns per company. Net returns will continue to be highly dependent on financial incomes, which will remain volatile, and is associated mainly with the market to market valuation of assets linked to equity investments.

Life insurance leverage ratio shows an upward trend, likely to maintain during 2016, particularly increasing the leverage ratios dispersion per company. While Fitch believes that leverage ratios are consistent with the life insurance requirements of its obligations, higher leverage ratios are a risk factor to be monitored.

The report '2016 Outlook: Chile Life Insurance' is available at www.fitchratings.com.