Adequate performance in the short and medium term point to a stable outlook for the Mexican insurance sector in 2016, according to a new Fitch Ratings report.

Fitch expects growth of the Mexican insurance and surety sector to be around 6% and 8%, respectively, in nominal terms. In addition, Fitch expects 3.3% growth for the Mexican economy as a whole in 2016.

Losses caused by Hurricane Odile and Patricia have been adequately absorbed by the insurance industry through robust catastrophic reserves and adequate reinsurance programs within the sector.

Fitch views the combined ratio as likely to increase in 2016, mainly as a result of the new regulatory framework and agricultural damage that has not been registered regarding Hurricane Patricia.

Fitch expects that companies will adapt to the recent regulatory initiatives. During 2015 insurers and surety sector implemented qualitative requirements from the Unique Insurance and Surety Circular and tested for quantitative factors. During 2016, companies will likely implement quantitative elements, which should strengthen equity and reserve levels.

The outlook report is based on public information disclosed by National Insurance and Surety Commission and also from data owned by the rating agency regarding the sector. The outlook report analyzes Fitch's perspectives regarding growth, profitability, capitalization, given ratings and regulatory changes.

The full report titled '2016 Outlook: Mexican Insurance Sector' is available at 'www.fitchratings.com' and 'www.fitchratings.mx.' or by clicking on the above link.

Additional information is available on www.fitchratings.com

2016 Outlook: Mexican Insurance (Strong Finances, Regulatory Changes and Economic Challenges)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=876177

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