The Rating Outlook is Stable.
KEY RATING DRIVERS
Pacifico Vida's rating continues to reflect its strong position in
Pacifico Vida's insurance premium mix remains focused in the life segment; but it is worth mention that the company also leverages its offerings in
Pacifico Vida's profitability remains strong and is underpinned both by its good operating performance and the good yield of its large investment portfolio. As such, Pacifico Vida was able to exceed the market average of the last four years, reaching a return on average assets ratio (ROAA) of 4.1% and a return on average equity (ROAE) of 30.4% as of
As were other insurers in
Pacifico Vida's investment portfolio shows adequate liquidity and coverage levels in terms of liability duration and currency mismatch. The portfolio also carries limited credit risk with its allocation to Peruvian sovereign debt (Fitch IDR of 'BBB+'), international investment grade securities and well-regarded domestic fixed-income securities.
The Stable Outlook reflects Fitch's view that intense competition in the domestic insurance market would not have a material impact on the company profile or on profitability in the medium term.
Key rating triggers that may lead to an upgrade include a sustainable improvement in company leverage ratios to below 5x, low volatility in earnings, especially considering the effect of financial incomes on the bottom line. In addition, a better credit risk profile over an extended period could favorably affect the rating.
Key rating triggers that may lead to a downgrade include recurrent volatility in earnings and profitability for an extended period, increasing leverage ratios over 7x, and a deterioration in its credit risk profile of its investment portfolio.
Additional information is available at 'www.fitchratings.com'
--'Insurance Rating Methodology' (
Insurance Rating Methodology
Source: Fitch Ratings
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