The upgrade follows Fitch's upgrade of Russia's Long Term Local-Currency Issuer Default Rating (IDR) to 'BBB' from 'BBB-' on 09 August 2019 (see 'Fitch Upgrades Russia to 'BBB'; Outlook Stable' at www.fitchratings.com). RNRC's rating and Outlook continue to mirror Russia's rating and reflect the strong parental support available to RNRC and its exclusive position in the local reinsurance sector underpinned by regulation.
RNRC is 100% owned by the Central Bank of Russia (CBR). CBR has made RUB49.7 billion of additional capital available, which would be injected into RNRC should any underwriting losses made on the portfolio of risks under sanctions erode the reinsurer's equity to a negative value.
RNRC was founded in August 2016 to increase the reinsurance capacity of the domestic sector and to offer coverage to local risks that are falling under sanctions. Regulations oblige Russian primary insurers to offer 10% of most reinsured business to RNRC. However, RNRC is only obliged to accept risks related to sanctioned businesses.