LatinNews Daily - 21 October 2020

* International credit ratings agency Fitch Ratings expects financial pressure on Mexican insurers and surety companies to persist this year. Citing the impact of the coronavirus (Covid-19) pandemic, Fitch states in a new report that Mexico’s insurance sector has demonstrated resilient financial performance and capitalization and leverage adequacy, despite a reduction in premiums. However, it forecasts that the insurance and surety sector will contract by between 7.7% and 5.2% by the end of the year, and says that “additional pressure could come from deviations in investment results and unexpected claims”. Another new report by Fitch also warned that results from the second quarter of 2020 indicated a “deterioration” in the operating environment for banks in Mexico. It highlighted that the sector had been affected by the cut in interest rates and reduced income via intermediation, among other things. Fitch also said that it believed that “the limited fiscal response” by the Mexican authorities compared with other countries in the region will continue affecting the payment capacity of borrowers.

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