AlfaStrakhovanie PLC

The stable outlook reflects our expectation that, in the next 24 months, AlfaStrakhovanie will maintain its solid competitive position and further sustain improvements in capital adequacy to the 'BBB' level. We could lower the ratings on AlfaStrakhovanie in the next 24 months if its capital weakens significantly below the 'BBB' level, according to our capital model, squeezed by weaker-than-expected technical performance, investment losses, or high dividends. A deterioration of the average credit quality of invested assets to below 'BB' might also trigger a negative rating action. A positive rating action over the next 24 months is remote, because our rating on AlfaStrakhovanie is capped by the sovereign foreign currency rating. The economy will expand by 3.7% in 2021, after a

...S&P Global Ratings expects AlfaStrakhovanie PLC to maintain a leading position in the Russian insurance market. AlfaStrakhovanie is the second-largest insurer (in terms of premium income) in the Russian property/casualty (P/C) market, particularly in the motor segment. However, we believe that challenging operating conditions in Russia hurt the company's earnings, in line with local peers. We forecast AlfaStrakhovanie's capital adequacy will remain at the '###' level, at least over the two-year outlook horizon. AlfaStrakhovanie's solid profitability, along with modest dividend payouts below 6%, will help the company build capital further in absolute terms and based on our capital model. At the same time, we see that the company operates with capital levels commensurate with large financial groups, which optimize internal capital allocation and are demanding to capital utilization. We expect management will remain focused on the quality of the underwriting process, supporting overall profitability....

Full Report