BELARUS: BELGOSSTRAKH affirmed at IFS 'B', outlook stable

5 May 2020 — Marina MAGNAVAL
Fitch Ratings affirmed insurer financial strength rating of the leading Belarussian insurance company - BELGOSSTRAKH at 'B' with stable outlook, according to the agency's report, published on April 30.

Fitch mentioned that "rating actions are based on Fitch's current assessment of the impact of the coronavirus pandemic, including its economic impact". The agency underlined "a meaningful weakening of BELGOSSTRAKH's Fitch Prism Factor-Based Model (FBM) score compared with the actual end-2018 IFRS-based balance sheet, and BELGOSSTRAKH's limited ability to absorb Fitch-modelled investment losses under our rating-case assumptions".

The agency also emphasized that the current situation may significantly weaken the quality of the portfolio of domestic credit risks insured by the company, since the "risks are highly concentrated per debtor and aggregated net retentions per single debtor are fairly significant relative to BELGOSSTRAKH's capital".

Fitch explained that the rating reflects the insurer's 100% state ownership, strong market position in Belarus, guarantees for insurance liabilities under compulsory lines and BELGOSSTRAKH's leading positions in many insurance segments of the country.

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