Fitch Ratings has maintained at B+ the insurer financial strength (IFS) rating of Bulgaria's Insurance Company Euroins, the main operating subsidiary of Euroins Insurance Group (EIG), part of Eurohold Bulgaria, with a stable outlook, as SeeNews reports.

According to the agency, the rating stems from Euroins's weak capitalisation and reserve adequacy. Fitch expects Euroins's capitalisation to remain weak at the end of this year due to uncertainty around reserve adequacy after the group's capital position was affected by claims reserve restatements in 2020.

Reserve adequacy is also seen as weak since Euroins reported significant restatements in its consolidated accounts caused by reserve deficiencies. Although the company has yet to demonstrate a longer record of smaller reserve deficiencies, the rating agency expects reserve adequacy and developments to improve.

The report says Euroins' financial performance is volatile as a result of inadequate reserving in 2020, the insolvency of Euroins Romania in 2022 and the partial disposal of its reinsurer, Insurance Company EIG Re (EIG Re), in 2023. Last year, Euroins posted a profit of BGN 23 million (EUR 11.8 million), compared to a loss of BGN 209 million in 2022.

*EUR 1 = BGN 1.95583