The outlook of the FSR remains stable, while the outlook of the Long-Term ICR remains negative. Concurrently, A.M. Best has withdrawn the Credit Ratings (ratings) as the company has requested to no longer participate in A.M. Best's interactive rating process.
The ratings reflect a likely improvement in Russian Re's profitability, limited business profile and adequate level of risk-adjusted capitalisation. An offsetting rating factor is the volatility in the company's operating performance in recent years. The negative Long-Term ICR outlook reflects the risk that the company will be unable to maintain underwriting profitability at a level supportive of the rating.
A.M. Best expects Russian Re's risk-adjusted capitalisation to strengthen in 2016 due to a likely increase in capital and surplus derived from positive operating results. The company's risk-adjusted capitalisation materially declined in 2015 due to deterioration in underwriting performance, which followed the introduction of a new regulatory requirement mandating increased claims reserves. Prior to 2016, the company reported underwriting losses in four successive years. Although prospective operating performance is expected to remain positive, it is subjected to significant volatility. This increases the uncertainty about the future adequacy of Russian Re's risk-adjusted capitalisation.
Source: AM Best
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