Ratings agency AM Best has placed under review with negative implications the Financial Strength Rating (FSR) and the Long-Term Issuer Credit Rating of a number of Russian insurance companies, driven by heightened geopolitical, economic and financial system risk in the country.
As Western nations impose sanctions on Russia amid its unprovoked invasion of Ukraine, which is now in day seven, AM Best has taken rating actions against insurers that are domiciled and write the majority of their business in the country.
The companies include GIC Perestrakhovanie LLC, Russian Reinsurance Company JSC, the INSURANCE COMPANY OF GAZ INDUSTRY SOGAZ, and Ingosstrakh Insurance Company PJSC.
Regarding SOGAZ, the ratings agency has also withdrawn the European Union-endorsed status of these Credit Ratings following recent changes to EU sanctions.
For each carrier, AM Best says that the ratings will remain under review while it evaluates the severity of the impact of international sanctions on Russia’s economy and financial system, and the subsequent consequences for the credit profile of the firms.
“Potential balance sheet and operational impacts include deterioration in the valuation and credit quality of investments, liquidity constraints, issues recovering from reinsurers and elevated claims costs,” says AM Best.