...Weak Economy, Negative Outlook: The economic outlook has deteriorated significantly since mid-2014 following sharp falls in the oil price and the rouble, coupled with a steep rise in interest rates. Western sanctions first imposed in March 2014 are weighing on the economy by blocking Russian banks' and corporates' access to external capital markets. Revised Growth Forecast: Having grown by just 0.6% in 2014, Fitch Ratings now expects the Russian economy to contract by 4% in 2015, compared with our previous forecast of minus 1.5%, as steep falls in consumption and investment are only partially offset by an improvement in net exports, driven by a sharp drop in imports. Growth may not return until 2017. Recession Pressures Underwriting Further: Fitch expects the sector's underwriting results to have been negative in 2014 as premium growth fell, especially in the most profitable segments and loss ratios increased. Double-digit inflation and the sharp depreciation of the rouble were further...
