Market Overview

A.M. Best Affirms Credit Ratings of Ingosstrakh Insurance Company PJSC


A.M. Best has affirmed the Financial Strength Rating of B+ (Good)
and the Long-Term Issuer Credit Rating of "bbb-" of Ingosstrakh
Insurance Company PJSC (Ingosstrakh) (Russia). The outlook of
these Credit Ratings (ratings) is stable.

The ratings reflect Ingosstrakh's balance sheet strength, which A.M.
Best categorises as strong, as well as the group's adequate operating
performance, neutral business profile and appropriate enterprise risk

Ingosstrakh's balance sheet strength is underpinned by its risk-adjusted
capitalisation, which is at the strongest level, as measured by Best's
Capital Adequacy Ratio (BCAR). Prospectively, A.M. Best expects
risk-adjusted capitalisation to remain at this level, supported by
strong internal capital generation. Offsetting factors for the balance
sheet strength assessment are the relatively low (although slightly
improved) credit quality of the group's investment portfolio and the
risk that the group may be required to inject further funds into its
subsidiary, Bank Soyuz JSC. Additionally, in order to manage its net
exposure to large corporate risks, the group relies on reinsurance

Ingosstrakh is one of the leaders in the insurance market in Russia,
with a strong competitive position in the retail segment. The insurer
operates in challenging market conditions with high regulatory and
political risks.

However, the regulator recently has announced its plan to gradually
liberalise the compulsory motor third-party liability segment, which is
a key market for Ingosstrakh. This is expected to improve market
conditions and to benefit the company over the medium term.

The group demonstrated a resilient, albeit volatile, level of
underwriting performance over the period 2013-2017. Whilst the five-year
weighted average combined ratio for the period is a solid 93%,
underwriting losses were recorded in 2013 and 2014, largely caused by
the unstable macroeconomic conditions in Russia. The group benefited
from robust investment returns during this period, driven by the high
interest rate environment in Russia. The overall level of profitability
is solid, reflected in a five-year weighted average return on capital of
17% over the period 2013-2017. However, operating performance is
assessed as adequate driven by the volatility of the performance metrics
over the period 2013-2017.

This press release relates to Credit Ratings that have been published
on A.M. Best's website. For all rating information relating to the
release and pertinent disclosures, including details of the office
responsible for issuing each of the individual ratings referenced in
this release, please see A.M. Best's
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
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