13 May 2004 02:22
Ingosstrakh rated `BB`, outlook stable
The outlook is stable, S&P said in a press release.
Standard & Poor's also assigned its 'ruAA' Russia national scale
MOSCOW. May 12 (Interfax) - Standard & Poor's Ratings Services assigned its 'BB' long-term
counterparty credit and insurer financial strength ratings to Russian insurer Ingosstrakh.
"The ratings on Ingosstrakh reflect the high level of industry risk
associated with the company's concentration in and exposure to the
rating to the insurer.
underdeveloped and rapidly growing Russian insurance market, and the significant investment risk due to the relative
immaturity of the Russian financial markets," said Standard & Poor's credit analyst Ashley Gill.
"These factors are partially mitigated by Ingosstrakh's strong competitive position, particularly in
commercial risks, good operating performance, and satisfactory capitalization."
Ingosstrakh is part of a composite insurance group that operates primarily in Russia (foreign currency BB+/Stable/B,
local currency BBB- /Stable/A-3), although its activities in the CIS and Europe are increasing. Shareholdings are
widespread, with the majority of shares held by two individuals and Russia-based investment group Basic Element (not
rated).
The stable outlook reflects Standard & Poor's expectation that Ingosstrakh will maintain its strong
competitive position in the commercial sector by leveraging its existing, market-leading expertise. The development of
its competitive position in personal lines will be gradual, but will be assisted by existing operational strengths.
Activities of subsidiaries are expected to come under greater parental control and demonstrate measured growth.
Earnings are expected to weaken, but remain good. Rapid growth, competitive pressures, and reducing investment yields
are all expected to take their toll on earnings in the next two to three years. Nevertheless, retained earnings are
expected to remain positive over the next three years to minimize capital funding requirements.
Capitalization is not expected to deteriorate, despite the significant expected growth. Capital requirements are
expected to be met by the shareholders or through an IPO.
[Interfax] |
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