Insurance - Guatemala - Honduras

Fitch Roundup: Seguros G&T, Afianzadora G&T, Ficohsa Seguros

Fitch Roundup: Seguros G&T, Afianzadora G&T, Ficohsa Seguros

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Fitch Centroamerica raised its long-term local scale rating of Guatemalan insurer Seguros G&T to AA- from A+ thanks to a contribution of fresh capital from shareholders that improved the company's risk profile.

In a release on the ratings action, Fitch noted that the company's paid-in capital doubled to 150mn quetzales (US$18.7mn) in 2009 on cash contributions from shareholders, reducing the liabilities-to-capital ratio to 2.6x from 4.1x.

The company's loss ratio remains low at 65.9%, compared to the market average of 67.3%. The release also said Seguros G&T maintains a "moderate level" of capital exposure thanks to its conservative reinsurance policies.

However, Fitch also noted that the relatively high concentration of the company's assets in real estate could cause liquidity issues in the event of a financial crisis.

To read the full report in Spanish, go to this link

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Fitch also affirmed its AA- long-term local scale rating of surety bond issuer Afianzadora G&T thanks to its leading position in the Guatemalan market and its good earnings and claims rates.

In a release on the ratings action, Fitch highlighted the company's "adequate" capitalization and conservative investment strategy.

However, Fitch also noted that "the high proportion of resources parked in real estate could affect the company's liquidity."

To read the full release in Spanish, go to this link

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Finally, Fitch also affirmed its long-term national scale A rating for Honduras' Ficohsa Seguros, citing the company's leading position in the market and its high operating efficiency.

The company has a low level of capital exposure, though its capitalization levels remain below those of the market in general, according to Fitch's release on the ratings action.

Despite losses from a recent earthquake, the company saw its loss ratio drop in 2009 to 55.8%, almost 200 basis points, the release said.

To read the full report in Spanish, go to this link