Fitch Ratings has lowered its ratings on a number of Russia insurers in light of the country’s invasion of Ukraine and the resulting economic sanctions.
The rating agency downgraded six Russian insurance companies’ Insurer Financial Strength (IFS) Ratings and the debt rating of one Russian insurer.
The downgrades follow Fitch’s downgrade of the Russian sovereign ratings to ‘C’ and Country Ceiling to ‘B-‘ earlier this month, which reflects the agency’s view that a sovereign default is imminent.
Analysts also said the new ratings reflect “a further weakening of the operating environment of the Russian insurance industry caused by deepening sanctions and Russia’s policy responses.”
And they added that sanctions and payment restrictions could limit access to international reinsurance markets, thereby reducing risk-management options for insurers.
The move follows a similar decision by fellow rating agency AM Best to downgrade the ratings of Russian insurers and reinsurers, having also moved Russia to a bottom country risk tier, owing to the heightened geopolitical, economic and financial system risk in the country.
AM Best is expecting Western re/insurers to face significant exposure to the Russia-Ukraine crisis as well, while analysts at KBRA have warned of “pain” for insurers and DBRS says the invasion will weigh on the outlook of the P&C sector.
Earlier today, brokers Aon and WTW joined Marsh McLennan in withdrawing business from Russia, saying they are “dismayed by the crisis,” while SCOR has elected to postpone its March 29th Investor Day to July, citing the geopolitical situation, humanitarian and global impacts of the Russian invasion.
