Rímac Seguros presented the scenarios it outlines for a possible exacerbation of the risks, which today are already high.
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In a scenario in which the conflict in the Middle East continues beyond April and the FEN is moderate, GDP would only grow between 1.5% and 2.5% this year, and inflation would rebound to 3.5% year-on-year, which would exceed the upper limit of the BCRP’s target range (between 1% and 3%).
Under that assumption, The issuing institute would raise its reference interest rate by up to 50 basis points, up to 4.75%in order to control inflation expectations, the insurer foresees.
“In an acidic environment, the Central Bank would have to react from monetary control (raising its key rate),” said Augusto Rodríguez, executive vice president of investments at Rímac.
In addition, estimated that the dollar price It would be between S/ 3.35 and “probably closer to S/ 3.50” in that higher risk scenario.
Luis Eduardo Falen, a professor at the Universidad del Pacífico, agreed that in a scenario of greater inflationary pressures, the BCRP would possibly raise its key rate by at least 25 basis points (today at 4.25%).
“Rising inflation is something that was not on the table towards the end of last year and the beginning of 2026. The scenario was one of controlled inflation, comfortably within the target range, but the risk has increased due to the conflict in the Middle East, which is reflected in the volatility of financial markets and the international price of oil.he explained. “The FEN is also an issue to monitor. Both are very relevant”he added.
Regarding the price of the dollar, Falen projected that, if the geopolitical impact continues, it could be between S/ 3.50 and S/ 3.60depending on the intensity reached.
Regarding credit, he explained that an increase in the key rate usually initially impacts corporate loans, and then moves towards loans to individuals.
Rímac estimates that in a higher risk scenario, the dollar would approach S/ 3.5. (Photo: USI)
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Investments
“There is a regulatory restriction that only allows insurers – in fixed income – to invest in investment grade bonds. What Rímac has prioritized since the beginning of the year is that they are not only of high quality, but also that they have liquidity”Rodríguez explained.
“In new investments, you can have a time preference, not only for high-quality assets, but also ensuring that they offer good liquidity, to always be prepared (as an insurance company) in case there is somewhat stronger stress”he noted.
In this sense, he explained that the insurer includes sovereign and corporate bonds in its portfolios, and, in terms of geographical distribution, these are local, Latin American, American and, to a lesser extent, European securities.
He also said that the most liquid bonds tend to be from the largest companies, but they must also go through “a validation process” of the trading frequency. “It may happen that the issue is huge, but it can be bought by an institutional that takes a good part and does not sell it”he explained.
“In Latin America, places that one (as an insurer) can take (to buy bonds) are Mexico and Chile, since they are investment grade”added the executive.
BCRP maintained its key rate without movement for the sixth consecutive month in March.
Yields
Regarding performance expectations for the rest of the year, Rodríguez said that interest rates have been rising, which favors the outlook for insurers’ portfolios.
“If we look at the 10-year (US) treasury curve, it has risen between 20 and 30 (basic) points. An increase in rates ends up improving the profitability prospects for the coming years”he pointed out.
The above would seem counterintuitive, taking into account that a rise in interest rates implies a lower price of bonds, since their relationship is inverse. However, he clarified that insurers benefit from an increase in their financial income.
“(As insurers) we are not looking at the market price of the portfolio, but rather that there are enough assets to cover the liabilities that are generated. So, a rate increase becomes a more constructive scenario for insurance companies because it allows them to gain competitiveness in the products they offer”said.
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Minimum impact of 0.1% of GDP
Although uncertainty persists, Rímac’s base scenario assumes a weak FEN until the end of the year and that the crisis in the Middle East will last two months (until April). Thus, the estimated impact would be 0.1% of GDP, equivalent to US$ 350 million.
In this situation of attenuated risks, inflation would be 2.4% year-on-year, the BCRP’s reference interest rate would remain at 4.25% and the price of the dollar would fluctuate between S/ 3.25 and S/ 3.35, that is, below the current level. Recently, ENFEN warned of the development of a new coastal El Niño phenomenon that would begin in March and last until November, with the highest probability (63%) that its magnitude would be weak.
