AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” (Excellent) of Santa Lucía S.A. Compañía de Seguros y Reaseguros (Santalucía) (Spain). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Santalucía’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management.

Santalucía’s balance sheet strength is underpinned by its risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), on both a standard and catastrophe-stressed basis. Additionally, the balance sheet strength assessment considers the company’s adequate reserving approach and limited catastrophe exposure, as most natural perils in Spain are covered by the Consorcio de Compensación de Seguros, the compulsory government natural catastrophe scheme covering physical damage. Partially offsetting rating factors include Santalucía’s slightly elevated investment risk profile compared with peers, as well as its limited access to capital markets and relatively high level of intangible assets following acquisitions in recent years. AM Best expects the company’s prospective capital position to benefit from good organic capital generation, supported by a prudent dividend policy.

Santalucía has a track record of solid technical earnings primarily stemming from the funeral expenses (decesos) line of business, in which it has a leading market position in Spain. In 2024, Santalucía reported a profit before tax of EUR 302.3 million (2023: EUR 329.1 million), supported by a strong investment performance and solid underwriting results although somewhat lower than in 2023. At year-end 2024, the non-life combined ratio increased to 95.5% (2023: 86.8%). The lower combined ratio in 2023 was mainly due to the impact of reserve releases in the decesos and life segments, which resulted from increased interest rates. In 2024, Santalucía generated a return-on-equity of 9.3% (2023: 11.5%), as calculated by AM Best.

Santalucía has an established profile as a provider of personal lines insurance in Spain and benefits from a strong brand and good reputation in the sector. The company’s business mix is relatively well-balanced, with a five-year average (2020-2024) gross written premium (GWP) split of 42% life and 58% non-life. While the company plans to increase its geographical footprint, its business profile is expected to remain concentrated in Spain, where Santalucía is the ninth-largest company by GWP as of June 2025.

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