S&P upgrades Russia’s LEXGARANT on management, governance improvements
S&P Global Ratings said that it has raised aviation and travel insurer LEXGARANT Insurance’s long-term counterparty credit and financial strength ratings to 'B+' from 'B'.
At the same time, S&P raised its national scale rating on the company to 'ruA' from 'ruA-'.
The upgrade is driven by the fact that LEXGARANT benefits from its management's expertise in and knowledge of the aviation insurance industry. In addition, S&P witnessed a gradual delegation of operational responsibilities within the company. The ratings agency considers that the company's strategy has become more consistent and predictable over the past two years, and management has formalized its approach.
LEXGARANT has established a number of committees that are responsible for accepting certain risks, rather than this being the CEO's sole responsibility. A strategic vision is in place, and the company is maintaining its focus on aviation and travelers' insurance. At the same time, delegation of responsibilities partly eliminates risks associated with dependence on key personnel.
LEXGARANT’s management team is relatively small compared with that of international peers, its business volumes are much lower and its management practices are still evolving. Consequently, S&P applies one notch of negative adjustment to the anchor of 'bb-'.