By  Matt Sheehan —- Analysts at Fitch Ratings have warned that Colombian insurers may face an impact to their loss ratios and overall financial performance due to social protests over the last month that have caused damage to property.

Fitch expects a moderate deterioration in profitability but does not expect these events to lead to immediate rating actions, although this option may have to be considered if the protests become prolonged.
So far, the insurers with the highest exposure to the most affected business lines are non-life, with analysts noting an increase in the claims ratio, especially for claims related to material damage.
The conclusion on the total economic costs faced is still under development, but affect insurers are considered to have adequate capitalisation levels to deal with the situation, with reinsurance programs set to insulate carriers from exposure.
Fitch observed that reinsurance companies had a greater impact in the all-risk policies, since these hedges tend to be highly assigned to the international reinsurance market.
Recent events in Colombia could further toughen prices, the rating agency added, resulting in higher reinsurance costs for insurance companies in both Colombia and the Latin American region