Median scale of business in the supplementary health sector
Fitch Ratings affirmed the ‘BB+(bra)’ National Long-Term Ratings of Unimed-Rio Cooperativa de Trabalho Médico do Rio de Janeiro Ltda. (Unimed-Rio) and its wholly-owned subsidiary Unimed-Rio Participações e Investimentos SA (UPar). The ratings outlook was revised to stable from positive. Subsequently, Fitch withdrew the ratings of both companies, for commercial reasons. The risk rating agency will no longer provide ratings, nor will it carry out analytical coverage of Unimed-Rio and UPar.
“Fitch withdrew the ratings on Unimed-Rio and UPar for commercial reasons. In this way, the agency will no longer provide ratings, nor will it carry out analytical coverage of these companies”.
“The outlook revision to stable incorporates Unimed-Rio’s challenges to strengthen its operating cash generation in 2022 in the face of an adverse operating environment, which has led to continued pressures on the loss ratios of healthcare operators”, explained Fitch.
The agency highlighted in a report that Unimed-Rio’s ratings reflect its medium scale of business in the supplementary health sector in Brazil, the low profitability of its operation and limited geographic diversification, despite the company’s leadership position in the capital of Rio de Janeiro. January partially mitigate this concentration risk.
The classification also incorporates the fact that Unimed-Rio remains in breach of its regulatory obligations with the National Supplementary Health Agency (ANS), as well as the expectation that adherence to these standards should not occur before 2024 if there is no entry. from some extraordinary source of liquidity. Unimed-Rio’s and UPar’s ratings were based on the consolidated risk of the group, due to their equal credit profiles, on an isolated basis.