Standard & Poor's Ratings Services said today it raised its long-term counterparty credit and insurer financial strength ratings on Russia-based reinsurer Moscow Reinsurance Co. (Moscow Re) to 'B+' from 'B'. The outlook is stable. At the same time, Standard & Poor's raised its Russia national scale rating on Moscow Re to 'ruA+' from 'ruA-'.
"The upgrade reflects Moscow Re's improved capitalization and quality of investments," said Standard & Poor's credit analyst Miroslav Petkov.
The ratings also factor in the high industry risk in the Russian (re)insurance market, and the risks associated with implementing the company's growth strategy and meeting its medium-term capital requirements. These negative factors are partially mitigated by Moscow Re's marginal operating performance.
The stable outlook reflects Standard & Poor's expectation that Moscow Re will grow at a faster rate than the Russian reinsurance market while maintaining solid profitability, with ROE of at least 15%. Also, it is expected that Moscow Re's capital adequacy ratio will exceed 150%, that the company will maintain the marginal quality of investment portfolio, and that, in agreement with its shareholders, no dividends will be paid for financial years 2005-2007.