July 2, 2014 / 9:07 PM / in 4 years

Fitch Affirms Maxseguros EPM Ltd's IFS Rating at 'BBB'; Outlook Stable

(The following statement was released by the rating agency) NEW YORK/BOGOTA, July 02 (Fitch) Fitch Ratings has affirmed Maxseguros EPM Ltd's Insurer Financial Strength (IFS) rating at 'BBB'. KEY RATING DRIVERS Maxseguros EPM Limited's rating is equalized to the rating of the parent due to Fitch considers that it is a core subsidiary. Empresas Publicas de Medellin E.S.P. (EPM) has a local-currency Issuer Default Rating (LC IDR) of 'BBB' with Stable Outlook. Maxseguros continues to have a non-retention risk policy and limited exposure of its equity. Maxseguros is considered a core subsidiary of EPM due to the tight linkage with EPM's Risk Management department. Maxseguros is responsible for the assurance strategy of all assets and subsidiaries of EPM Group. Besides, there is a formal business partnership agreement between EPM and the captive that provides rights and obligations to both parties and the resources necessary for the optimal operation of the captive, especially in regards to investments, human resources, and corporate governance. Maxseguros' profitability shows a positive trend. At December, 31 2013, Maxseguros reported a net income of USD2.6 million, 37% higher than the previous year. This performance was as result of greater ceding commissions coming from its participation in the security program of Ituango's construction all risk coverage. Capitalization and Liquidity levels are strong. At Dec. 31, 2013, Maxseguros equity reached USD26 million, 26% higher than the previous year due to the policy of reinvesting profits. The coverage ratio of liquid assets over liabilities is 1,2x and the investments are placed in financial institutions with good credit quality and marketable investments in funds concentrated in fixed-income investments. RATING SENSITIVITIES The Rating Outlook is Stable. An upgrade may be considered if positive changes occur to the credit profile of the parent. Key rating triggers that may lead to a downgrade include negative changes in availability and willingness of Empresas Publicas de Medellin to provide support. Contact: Primary Analyst Franklin Santarelli Managing Director +1-212-908-0739 Fitch Ratings, Inc. 33 Whitehall St. New York, NY 10004 Secondary Analyst Milena Carrizosa Director +57 1 326-9999 ext 1090 Fitch Ratings Colombia Calle 69 A No. 9-85 Bogota, Colombia Committee Chairperson Julie Burke Managing Director +1-312-368-3158 Media Relations: Christian Giesen, Frankfurt am Main, Tel: +49 69 768076 232, Email: christian.giesen@fitchratings.com. Additional information is available at 'www.fitchratings.com'. Applicable Criteria and Related Research: --'Insurance Rating Methodology' (Nov. 13, 2013). Applicable Criteria and Related Research: Insurance Rating Methodology here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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