Alfastrakhovanie, OAO

The positive outlook reflects our expectation that, over the next 12-18 months, Alfastrakhovanie can maintain its solid competitive position and improve its capital adequacy to the 'BBB' level. We could raise our rating over the next 12 months if: Alfastrakhovanie sustainably improves its capital adequacy to the 'BBB' level due to solid net retained earnings; or We see potential risks in the Russian insurance sector reducing, despite the challenging environment, with a lower negative impact on Russian insurance companies. We could revise our outlook on Alfastrakhovanie to stable or take a negative rating action if, in the next 12 months: Its capital weakened significantly below the 'BBB' level, according to our capital model, squeezed by weaker-than-expected technical performance, investment losses,

...S&P Global Ratings expects AlfaStrakhovanie, OAO to maintain leading positions in the Russian insurance market. AlfaStrakhovanie will maintain its position as the second largest insurer (in terms of premium income) in the Russian property/casualty (P/C) market, particularly in the motor segment. However, we also believe that challenging operating conditions in Russia continue to hurt the company's earnings, in line with local peers. We forecast AlfaStrakhovanie's capital adequacy will remain at least at the '###' level over the outlook horizon. AlfaStrakhovanie is operating with capital levels more comparable with large financial services groups, which optimize internal capital allocation. We expect that sound profitability, along with modest dividend payouts below 6%, will help the company to build capital further in absolute terms and based on our capital model. We expect management will remain focused on the quality of the underwriting process, supporting overall profitability. The insurer...

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