XPRIMM: How do you evaluate the company's result for 2013?
Igor SHEKHOVTSOV: At the moment we still have our IFRS for the 2013 results being prepared by auditor thus final results are still to come. What we can say at the moment is that UNITY Re has confirmed its leading position among specialist reinsurers with more than RUB 2,400 million of GWP as per the results of 2013. Relatively higher level of losses should be the most important trend of the year 2013 for Russian market and is likely to continue in 2014, meaning that companies should again reconsider their strategy and adjust to current conditions.

XPRIMM: Which is the geographical distibution of your underwritings?
I. S.: Our focus has always been set on Russia & CIS - our core markets with more than 300 constant partners producing around 85% of our GWP for 2013. We cooperate with each and every insurance company from Russian Top-50 which gives us great opportunities in view of a huge business concentration within Top-50 insurance companies.

Remaining 15% geographically originates from regions such as MENA, South America and Asian Pacific and produced by either strong regional brokers or local offices of large international broker thus we avoid situations with inadequate pricing not losing great part of our premium in long broker chains.

XPRIMM: What are main parameters used by Unity Re for choosing an international partner for risks transfer in other countries? Is there any common unique reinsurance policy or UNITY Re has its own method for choosing international partners?
I. S.: Being a reinsurance company we face quite a narrow list of high level securities writing retro due to accumulation mitigation measures top reinsurance companies have taken restricting writing retro from the markets they are heavily engaged with providing treaty capacities for insurance companies. At the same time our business book requires us to have an A rated panel of reinsurers in our treaties, otherwise we won't be assigned any line in all of prestigious accounts in which we participate along with big international players.

Our decision was to stick to recognized Leaders with little Russian exposure despite relatively higher price for both marine and property in order to avoid certain coverage restrictions and/or special acceptances being set in order to control their accumulation by means of controlling what we write and up to what extent.

It is our 4th year with same Leaders and stable panel. We did never regret that loading we paid our Leader over the price of his competitor.

XPRIMM: It appears that for the last few years ratings do not give a 100% fair image of the financial status of a partner. What is the position of UNITY Re regarding this sensitive matter?
I. S.: I will be as frank as all rating agencies are and will simply repeat their own basic determination of the rating being no more than an expert assessment of probability that certain company will meet its mid-term obligations. So the answer is quite obvious - there is no guarantee from anybody regarding anything.

Still the modern financial architecture we live in has become so extremely dependent on these assessments-with-no-obligations called ratings that if you want to be successful and enjoy high quality business you are forced to have one. UNITY Re is A.M. Best rated at "B+" level with a positive outlook which is a very strong result for an independent Russian based reinsurer.

XPRIMM: What are the main differences between the Western and Russian partners that you have experienced in your practice?
I. S.: I would say despite overwhelming financial positions and huge experience, especially in CAT related solutions I don't feel that there is something else much left. Talking about leading companies in Russia they have all employed best international management patterns adjusted to the realities of our market thus share pretty much the same standards as our western colleagues.

XPRIMM: UNITY Re is a leader among the professional reinsurers in the former Soviet Union. What is your competitive advantage?
I. S.: In current environment where your strong capital position is just a basic requirement to enter the security list of a large insurance company and A rated reinsurers offer enormous capacities at a very low price it may look like there is not much left to offer to the market. Actually there is something.

UNITY Re provides unrivalled service in supporting our clients insurance operations in a quickestand most effective manner offering both a truly exposure based cost effective reinsurance coverage and market acknowledged claims handling performance. We treat all our clients as long term partners and always seek for well-balanced solutions answering all their needs.

XPRIMM: How do you evaluate the legal obstacles from the CIS countries in the development of full cooperation in the field of reinsurance?
I. S.: I would say it is irrational to introduce extreme rating requirements which simply ban all the long term well established relations with Russian reinsurers, even with those rated at much higher level than any domestic one. What is the logic of having such rating requirements in Kazakhstan which is economically integrated with Russia by means of sharing united custom space, a space designed free of borders? There could be no answer to that question, because there is never any logic in restricting competition.

Notwithstanding the current environment and inability to operate on certain markets we are still positive about long term prospective of cooperation between our countries and will maintain our presence in all markets of CIS.

XPRIMM: How do you evaluate the rate tariffs for reinsurance segment and what are the company's objectives for the current year?
I. S.: Generally rates are stable. Stable and low. And I doubt there is something that can initiate upward trend this year.

Our strategy has always been quite a conservative one. We plan to keep our growth stable and in pace with Russian insurance market, maintain leading position among specialist reinsurers and provide even better services to our partners!