OREANDA-NEWS. On July 29, 2008 Fitch Ratings has upgraded Transsiberian Reinsurance Corporation’s (Transsiberian Re) International Insurer Financial Strength (IFS) rating to ‘BB-’ (BB minus) from ‘B+’ and National IFS rating to 'A+(rus)' from ‘A-(A minus)(rus)’. The Outlooks for both ratings have been revised to Stable from Positive.

As stated in the official press release of Fitch agency the upgrades reflect the strengthened capital position of the company. In 2007-08, the equity base of the company grew substantially due to a RUB 60m external capital injection and substantial release of the claims case reserve accumulated before 2006, which was externally audited and confirmed by independent actuaries in the IFRS accounts. The ratings continue to take into account the strong operating performance of the company and its experienced management.

Among the positive changes Fitch analysts consider increase of the net retention levels. In 2007, Transsib Re wrote RUB 1,034m of gross premiums, a 10% decrease from 2006. At the same time, due to the less intensive utilisation of retrocession, net premiums grew by 9.5% to RUB 618m in 2007 from RUB 564m in 2006. Thus, the strengthening of capitalization enabled Transsiberian Re to raise own net retention from 49% in 2006 to 60% in 2007.

The ratings also reflect the evolving geographical pattern of the insurance portfolio of Transsiberian Re. As a result of the introduction of legislative barriers for non-resident reinsurers, the share of risk written in Ukraine fell to 1% in 2007 from 22% in 2006, and this business was replaced by a substantially higher volume of risk written in Russia, Turkey and other European and Asian emerging markets.

Transsiberian Re collaborates with leading international rating agencies for already three years. Moreover, the Corporation is the sole company of insurance market in Russia, with international ratings of financial stability and credit ratings from two international agencies: Fitch and AM Best.