S&P Global Ratings has announced plans to withdraw all of its outstanding ratings on Russian firms, in line with new regulations imposed by the European Union (EU).
Earlier this month, S&P announced the suspension of its commercial operations in Russia, in response to the country’s widely-condemned invasion of Ukraine.
Following that, on March 15, 2022, the EU announced a ban on providing credit ratings to legal persons, entities, or bodies established in Russia.
Accordingly, S&P plans to withdraw outstanding ratings on relevant issuers before April 15, 2022, the deadline imposed by the EU.
Fitch and AM Best previously announced that they had downgraded the ratings of Russian re/insurers, 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.
So far, a number of major insurance and reinsurance companies have already made the decision to withdraw their business from Russia following its invasion of Ukraine, including broking giants Marsh McLennan, Aon and WTW.
But there remain concerns around potential large losses for insurers, most notably following Russia’s move to nationalise $13 billion of stranded Western planes, but with cargo underwriters also scrambling to ditch Russian business.
