Fitch Ratings has affirmed Balboa Re’s International Insurer Financial Strength Rating (IFS) at 'BBB+', for which the rating outlook is stable.
Fitch has stated that the Citigroup announcement to exit its retail banking and insurance operations in 11 countries has had “no immediate impact” the international rating of its captive reinsurance company, Balboa Re.
Following the announcement, Fitch changed its view on the strategic importance Balboa Re has for Citigroup.
Fitch has stated that it believes that currently this subsidiary has “limited importance” to its shareholder, without affecting however Fitch's view of the rating assigned.
The rating of Balboa Re is based on the ability and willingness of the company's ultimate parent, Citigroup, to provide support when needed.
Fitch claims that Citigroup has the ability to financially support Balboa Re, and the willingness to do so will remain unchanged, while the ownership of this reinsurance operation is maintained.
As a result, the agency believes that the support of Citigroup will remain while Balboa Re maintains synergies and is owned by this group.
The rating may change if Balboa Re is sold to investors with different credit profiles than the current parent. In that scenario, Fitch has stated that it will evaluate the potential support from its new shareholders.
