BRC downgrades Colombia's Equidad Seguros de Vida

Rating agency BRC Investors Services - a S&P subsidiary - cut Colombian life insurer Equidad Seguros de Vida's (EV) rating to 'BBB+' from 'A-' with a negative outlook, S&P said in a release.

The rating was downgraded following a deterioration of the company's capital position, profitability, and higher debts due to the liquidation of Coopseguros del Ecuador, in which EV has a controlling stake.

The negative outlook reflects BRC's expectation that EV will maintain a low solvency ratio in the next 12 months as it views a short-term capitalization as unlikely due to the insurer's cooperative ownership structure. This in turn will reduce the possibility of stronger premium growth and better profitability.

With its weaker capital position, EV will also have a reduced capacity to face unexpected losses in a scenario of increasing claims due an economic downturn, the ratings agency said.

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