Fitch puts Ethias on positive watch

Fitch Ratings said it placed Ethias SA's long-term issuer default rating on Rating Watch positive, along with its undated subordinated debt rating of BB and dated subordinated debt rating of BB.

The actions follow news that Ethias is considering a plan aimed at strengthening its solvency position and reducing the sensitivity of its solvency coverage ratio to changes in interest rates, Fitch explained.

The resolution of the watch will be dependent on the successful completion of the plan, the agency said.

Fitch said it understands that the National Bank of Belgium asked Ethias to implement a plan to strengthen the company's capital position and reduce the volatility of its solvency coverage ratio and its sensitivity to lower interest rates.

Ethias has an adequate, but volatile, capital position, the agency said, reflecting its exposure to interest-rate risk due to the relatively high level of minimum guaranteed returns in its life insurance business and the duration gap between the corresponding assets and liabilities.

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