Fitch Affirms Ageas' Portuguese Entities; Withdraws Ratings
The entities are Ocidental-Companhia Portuguesa de Seguros, S.A. (Ocidental Seguros) and Medis - Companhia Portuguesa de Seguros de Saude (Medis), rated at Insurer Financial Strength (IFS) 'BBB', and Ocidental-Companhia Portuguesa de Seg. de Vida, S.A. (Ocidental Vida), rated at IFS 'BBB-'. The Outlooks were Positive prior to withdrawal.
Fitch has withdrawn the ratings as Ocidental Seguros, Medis and Ocidental Vida have chosen to stop participating in the rating process. Therefore, Fitch will no longer have sufficient information to maintain the ratings. Accordingly, Fitch will no longer provide ratings or analytical coverage for Ocidental Seguros, Medis and Ocidental Vida .
KEY RATING DRIVERS
The rating of Ocidental Seguros and Medis reflects their importance, in Fitch's view, to Ageas following the acquisition of full ownership by Ageas of these entities in June 2014. The IFS ratings of Ocidental Seguros and Medis are two notches above Portugal's sovereign rating (BB+/Positive) and their standalone assessment. Fitch views these operations as "very important" to Ageas, according to the agency's insurance group rating methodology.
The IFS rating of the life insurer Ocidental Vida is one notch higher than Portugal's sovereign rating and its standalone assessment. Ageas' stated strategy is to focus on the non-life business and Ocidental Vida was not part of the acquisition that involved Ocidental Seguros and Medis. Fitch views Ocidental Vida as "very important" to Ageas, albeit to a lesser extent than the non-life companies.
The ratings of Ocidental Vida, Ocidental Seguros and Medis also reflect their strong capital (albeit declining for Ocidental Vida following capital management actions by Ageas), robust non-life profitability and strong business position within the Portuguese market. This is partially offset by pressures on life earnings due to a challenging operating environment in Portugal.
The ratings take into account the exposure of the companies' balance sheets to Portuguese state assets. The Positive Outlooks on these ratings reflect that on Portugal's sovereign rating.