Research Update: Cyprus-Based KLPP Insurance and Reinsurance Affirmed At 'BB+' On Measures To Reduce Exposure To Russia; Outlook Negative

Although KLPP has a significant capital buffer, we see uncertainty regarding the potential financial impact of its exposure to Russia, as well as implications for its competitive position in international insurance markets as a result of the Russia-Ukraine war. We understand KLPP is in the process of divesting its investments in Russia-based affiliates, which would materially reduce the asset exposure, and in our view, its measures to reduce its overall exposure to Russia help reduce the likelihood of a downside scenario. As a result, we affirmed our 'BB+' ratings on KLPP and removed them from CreditWatch, where we placed them with negative implications on March 2, 2022. The negative outlook reflects potential adverse impact of KLPP's Russia-related exposures on its

...- Although KLPP has a significant capital buffer, we see uncertainty regarding the potential financial impact of its exposure to Russia, as well as implications for its competitive position in international insurance markets as a result of the Russia-Ukraine war. - We understand KLPP is in the process of divesting its investments in Russia-based affiliates, which would materially reduce the asset exposure, and in our view, its measures to reduce its overall exposure to Russia help reduce the likelihood of a downside scenario. - As a result, we affirmed our '##+' ratings on KLPP and removed them from CreditWatch, where we placed them with negative implications on March 2, 2022. - The negative outlook reflects potential adverse impact of KLPP's Russia-related exposures on its competitive position, as well as residual risks linked to a qualified audit opinion for a German property subsidiary that we expect will be resolved during 2022....

Research Update