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 indicated resilience of the insurer's capitalization, compared with the actual result based on end-2018 IFRS-based balance sheet, which should help EXIMGARANT "absorb the Fitch-modelled investment losses and a moderate recession-driven decline in its underwriting profitability".
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 EXIMGARANT's capital".
Fitch explained that the rating reflects the insurer's 100% state ownership, systemic role as the local export credit agency and the presence of guarantees for insurance liabilities under compulsory lines and export insurance, according to the report.
Based on 2019 market results, EXIMGARANT is in TOP-10 insurance companies from Belarussian market.
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