KLPP Insurance and Reinsurance Co. Ltd.

The stable outlook reflects our view that KLPP will continue to take all the necessary steps to resolve the existing qualified opinions in its annual report and that potential capital volatility from its Russian assets or the assets that are the basis for the qualified opinion will remain very limited, relative to its capital base. The stable outlook also reflects our view that KLPP will maintain its strong financial risk profile, backed by a sufficient buffer above the 99.99% confidence level, according to our capital model. We could lower the ratings over the next 12 months if: KLPP does not take all the necessary steps to resolve the existing qualified opinions; New significant governance-related issues emerge; The company experiences significant

...Although KLPP Insurance and Reinsurance Co. Ltd. (KLPP) continues to have qualified opinions in its 2023 annual report, we think the insurance company will take necessary steps to resolve these with no significant effect on its capital and earnings. KLPP's 2023 annual report again contains qualified opinions with regard to KLPP's investments in a loan to a subsidiary in Germany, as well as a new qualified opinion with regard to an investment in the form of a non-controlling interest in a company operating in Russia. For both investments, the auditor indicated insufficient information. However, we believe KLPP is committed to resolving these qualified opinions via active measures to improve the transparency or sale of these assets. KLPP's franchise remains in the development stage. KLPP's franchise has yet to demonstrate that it can increase its scale sustainably and attract meaningful, profitable, and diversified business over a prolonged period as KLPP shifts its focus toward competitive...

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