S&P Raises Moscow Re Rating to ‘B+’

September 8, 2005

Standard & Poor’s Ratings Services announced that it has raised its long-term counterparty credit and insurer financial strength ratings on Russia-based reinsurer Moscow Reinsurance Co. “B+” from “B’.” with a stable outlook. S&P also said it has raised its Russia national scale rating on Moscow Re to “ruA+” from “ruA-.”

Standard & Poor’s Ratings Services announced that it has raised its long-term counterparty credit and insurer financial strength ratings on Russia-based reinsurer Moscow Reinsurance Co. “B+” from “B’.” with a stable outlook. S&P also said it has 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,” stated S&P credit analyst Miroslav Petkov. S&P also noted that the new ratings “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.” The bulletin also indicated, however that “these negative factors are partially mitigated by Moscow Re’s marginal operating performance.”

S&P said the stable outlook reflects its “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 percent. Also, it is expected that Moscow Re’s capital adequacy ratio will exceed 150 percent, 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.”

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