OREANDA-NEWS. On 24 July 2009 was announced, that international rating agency Standard & Poor`s confirmed long-term counterpart and financial stability credit ratings of Ingosstrakh IJSC at BBB-, negative outlook, and the national scale rating at  ruAA+. In its report, S&P says that the negative outlook is due to the growing sector and country risks and a difficult macroeconomic situation. Standard & Poor`s underlined that the insurance markets of Russia and CIS feel an unprecedented pressure because of deteriorating economic situation in the country. At the same time, Ingosstrakh has a developed operating structure, a large experience and competence, which enables the company to manage some of the risks.

The rating service of Standard & Poor`s says  the management team of Ingosstrakh is strong, and regards as a positive factor the ability of the management of the company to address strategic tasks in an unfavorable external environment.

In its report, Standard & Poor`s speaks about competitive advantages of Ingosstrakh thanks to its presence in the Russian market and abroad for over 60 years, high brand awareness,  a wide network of sales channels, and relatively low acquisition costs.

Ingosstrakh’s geographic diversification is regarded as a positive rating factor and as a competitive advantage as compared with peers in the domestic market. The portfolio is well diversified by types of investments. Another positive factor is that volume of investments in the volatile securities market reduced to 8% of the capital. 

The experts of Standard & Poor`s emphasize that high capitalization of Ingosstrakh  builds on capital adequacy, sufficient insurance reserves and satisfactory reinsurance protection. Ingosstrakh exceeded the minimum statutory volume of capital as approved by the regulator at 130%: for Ingosstrakh this indicator reached 151%.  

However, the report sets forth that minority shareholders restrain any increase in the authorized capital of Ingosstrakh, which has a negative impact on the ability of the Insurer to raise additional capital.

Negative outlook is reflective of the sector and country risks due to negative macroeconomic indicators, as well as of the general negative outlook for many Russian banks. 

The outlook may be upgraded to “stable“ if the negative changes in the investment portfolio of the company stop and current negative macroeconomic indicators improve.

According to General Director of Ingosstrakh IJSC Alexander Grigoriev, “Ingosstrakh appreciates that the requirements of the rating agency are getting more stringent, and moreover, shares this approach in the situation of the international financial crisis. This principled and professionally rigorous approach of Standard & Poor's in assessing the financial market, must also be used by Russian rating agencies".