Russian insurers hit by rating cuts as Putin’s war unsettles market

Three Russian insurance companies have had their credit ratings downgraded or withdrawn in the wake of further increases in geopolitical, economic and financial system risk in the country.

The affected insurers include Ingrosstrakh, GIC Perestrakhovanie and Russian Re.

AM Best has downgraded the long-term issuer credit rating of Ingrosstrakh from BB+ to BB, with its financial strength rating affirmed as B.

GIC Perestrakhovanie’s long-term issuer credit rating has been downgraded to BB+ from BBB- and its financial strength rating to B from B+ and its.

Russian Re’s long-term issuer credit rating of BB- and its financial strength rating of B- have been put under review with negative implications.

The rating agency cited the “deterioration in economic and financial system conditions in Russia” as a key factor for the downgrade.

AM Best also factored the “sanctions recently imposed by the European Union that will ban the provision of ratings to legal persons, entities or bodies established in Russia.” AM Best said.

Additionally, the downgrades factored in the insurers’ reduced access to international reinsurance capacity and the risk of elevated claim costs caused by the depreciation of the Russian rouble and the associated inflationary pressures.

These ratings downgrades and withdrawals reflect what AM Best said would be the “significant fallout” from Russia’s invasion of Ukraine.

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