AM Best has placed under review with negative implications the financial strength rating of B+ (Good) of Russian reinsurer Unity Re, following its agreed acquisition by SPAO RESO Garantia on 28 July 2016 for R1.6 billion ($25 million).
RESO Garantia, Unity Re’s sister insurance company and part of the RESO Group, comprises insurance, motor, banking and leasing businesses in Russia and its neighbouring countries.
According to AM Best, RESO Garantia’s ownership could place a strain on the rating fundamentals of Unity Re, as well as uncertainty regarding Unity Re’s business strategy following the acquisition.
While Unity Re is under review, AM Best will collect additional information on RESO Garantia in order to conduct a comprehensive analysis of RESO Garantia's financial strength.
The ratings will remain under review until the transaction has closed and AM Best has completed its assessment of the impact of the acquisition on Unity Re's rating fundamentals.