OREANDA-NEWS. December 25, 2009. Fitch Ratings reviewed its forecast on SOGAZ ratings from “Stable” to “Positive” and confirmed the Group’s financial stability rating (FSA) on the international scale as BB, and according to the Russian scale as AA-(rus), reported the press-centre of SOGAZ.

As stated in Fitch’s official letter, the “Positive” forecast “reflects the agency’s opinion concerning the noticeable increase in the capitalization of the company and improving operational activity over the 9 months of 2009”. Fitch’s experts believe that the substantial capitalization of SOGAZ together with its strong market position and well-balanced underwriting policy in the key segments of corporate insurance increase the chances of the Group to handle the influences of the complicated operational environment in Russia.

According to Fitch’s analysts, the results of the 9 months of 2009 showed strengthening of the Group’s capitalization due to the restored level of investment income, as well as maintaining the operating performance level and a slowdown in the growth of insurance premium. Fitch does not think that this slowdown is a factor that holds back SOGAZ’s ratings with account to the current decrease in the Russian insurance sector.

According to Fitch’s letter, SOGAZ generates relatively stable and strong revenue with a good combined ratio value – it is expected that in 2009 the combined ratio will improve in comparison with 86.1 percent achieved in 2008. The rating agency believes that this improvement will be conditioned by a drop of the acquisition expense ratio and a release of technical reserve as a result of the anticipated slowdown in the growth of insurance premium.

Fitch’s experts also say that restructuring of SOGAZ’s property reinsurance program towards stronger reinsurers “may put some pressure upon the loss ratio, but at the same time it will lead to an increase of the credit quality of the company’s balance sheet”. Altogether, Fitch believes that “SOGAZ’s adequate underwriting policy together with its strong positions in the market will probably allow the insurer to maintain its performance indexes and, to some extent, resist the pressure of the operational environment”.

“We are satisfied that within a short period of time another large international rating agency has reviewed its forecast on SOGAZ ratings. Taking into consideration the negative trend that we are facing today, it is a weighty argument for our clients and business partners”, says Vadim Yanov, Chairman of the SOGAZ Management Board, “We hope that following the results of 2009, SOGAZ’s net profit will grow by one third and will reach approximately RUR 4.2 billion. According to our estimates this is going to be one of the best performance values among all Russian insurers.”

As it was reported earlier, in November 2009 another major international rating agency, Standard & Poor’s also improved its forecasts on OJSC SOGAZ ratings from “Stable” to “Positive”.