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Best’s News & Research Service - December 12, 2018 04:58 PM (EST)

AM Best Upgrades Credit Ratings of Santa Lucía S.A. Compañía de Seguros y Reaseguros

  • December 12, 2018 04:58 PM (EST)
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London //BestWire// - AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” from “a-” for Santa Lucía S.A. Compañía de Seguros y Reaseguros (Santalucía) (Spain). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.

The ratings reflect Santalucía’s balance sheet strength, which AM Best categorises as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

The rating upgrades reflect AM Best’s view that the acquisition of Aviva Vida y Pensiones, S.A. de Seguros y Reaseguros (Aviva), Aviva Gestión SGCIIC and its 50% stake in the life insurance joint ventures, Unicorp Vida, Compañía de Seguros y Reaseguros, S.A. and Caja España Vida, Compañía de Seguros y Reaseguros SA, will translate into improved and stable operating performance. Santalucia’s underwriting results are supported by a track record of solid technical earnings primarily stemming from the funeral expenses (decesos) line of business, where it has a leading market position. The newly acquired life portfolio is expected to provide Santalucía with a more balanced product offering in the domestic market, combined with enhanced distribution capabilities through the bancassurance and broker channels, which in turn is expected to strengthen the group’s overall profitability. As at year-end 2017, Santalucía’s profit before tax rose 51% compared with 2016, reaching EUR 171.8 million.

Although the acquisition increased Santalucía’s capital requirements, mainly as a result of reduced available capital following the recognition of goodwill, risk-adjusted capitalisation stands at the strongest level. Prospectively, Santalucía’s capital position is expected to gradually improve through internal capital generation. Furthermore, the group’s balance sheet strength continues to be protected against the occurrence of most catastrophic perils, which are covered by the Spanish government’s national scheme (Consorcio de Compensación de Seguros).

Santalucía has an established profile as a provider of personal insurance product lines in Spain, with a leading position in the funeral expenses line of business, and benefits from a long-standing brand and good reputation in the sector. Following the acquisition of the Aviva Spanish business, Santalucía has become the seventh-largest insurance group by gross written premium in Spain, with its profile enhanced by an improved business mix and a broader reach of its distribution network.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry.



Spain Europe Financial Strength Press Release Insurance Issuer Credit Rating Best's Credit Rating Action


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