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FOR IMMEDIATE RELEASE
LONDON - AUGUST 19, 2016 10:55 AM (EDT)
A.M. Best has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of “bbb” of INSURANCE COMPANY OF GAZ INDUSTRY SOGAZ (SOGAZ) (Russia). The outlook for each rating remains negative. SOGAZ is the ultimate operating parent of the SOGAZ Group, which provides a range of insurance and non-insurance related services.
The rating affirmations reflect SOGAZ’s solid consolidated risk-adjusted capitalisation, strong operating performance and robust competitive position in its local market.
The negative outlooks for SOGAZ’s ratings reflect the material exposure of its underwriting and investment portfolios to weak macroeconomic conditions in Russia. SOGAZ maintains a relatively high investment risk profile, due to the low credit quality of its fixed-income portfolio (by international standards) and the heightened financial system risk in the country.
SOGAZ’s consolidated risk-adjusted capitalisation remains solid, underpinned by its large capital base and excellent internal capital generation. In 2015, the group’s risk-adjusted capitalisation was strengthened by material profits reported in the year. A.M. Best expects SOGAZ to maintain solid consolidated risk-adjusted capitalisation in the medium term, supported by an anticipated slowdown in premium growth and the expectation that the group will maintain technical profitability. In addition, SOGAZ’s balance sheet is protected by a comprehensive reinsurance programme and a conservative reserving approach.
Operating performance has been strong in recent years, as demonstrated by a five-year average return on capital and surplus of 25.8% and a combined ratio of 90.9% (2011-2015). SOGAZ maintains a robust business profile within the commercial lines segment in Russia, supported by a strong brand and established relationships with its large industrial clients.
This press release relates to rating(s) 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 Recent Rating Activity web page.
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.