S&P Assigns ‘B’ Rating to Moscow Re

January 24, 2005

Standard & Poor’s Ratings Services announced that it has assigned its ‘B’ long-term counterparty credit and insurer financial strength ratings to Russia-based (re)insurer Moscow Reinsurance Co. (Moscow Re) with a stable outlook. S&P also assigned its ‘ruA-‘ Russia national scale rating to the (re)insurer.

“The ratings reflect the high industry risk of operating in the Russian (re)insurance market, Moscow Re’s weak investments, and the risks associated with implementing the company’s growth strategy and meeting its medium-term capital requirements,” stated S&P credit analyst Miroslav Petkov. “The ratings are supported by Moscow Re’s marginal operating performance.”

S&P said the stable outlook reflects its “expectation that Moscow Re will complete its plans to diversify and improve the credit quality of its investment portfolio. This includes moving toward limiting exposure to any single counterparty to 10 percent of equity. It is expected that Moscow Re will increase its market share while maintaining solid profitability, with total gross profit of Russian ruble 1.1 billion ($39 million) for 2004-2006.”

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