PRESS RELEASE: RA Expert-Rating confirms the rating of IC BUSIN at the level uaAA

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PRESS RELEASE: RA Expert-Rating confirms the rating of IC BUSIN at the level uaAA

27/09/2012

On September, 27th, 2012 RA Expert Rating confirmed financial strength rating of JSC IC Busin (USREOU code 19492371) at the level uaAA on national scale. The rating is confirmed following the analysis of Company work results in H1 2012.

Table 1

Key performance indicators of JSC IC BUSIN

in H1 2012, UAH th., %, p.p.

Indicators	H I 2012 (30.06.2012)	H I 2011 (30.06.2011)	Change	Growth rate, %
Total assets, UAH th.	93736,5	82910,9	10825,6	13,06%
Shareholders’ equity, UAH th.	45120,9	43582,1	1538,8	3,53%
Total liabilities, UAH th.	48615,6	39328,8	9286,8	23,61%
Shareholders’ equity/Insurer liabilities, %	92,81%	110,81%	-18,00 p.p.	-
Cash and cash equivalent, UAH th.	40927,6	34007,7	6919,9	20,35%
Cash means/Insurer liabilities, %	84,19%	86,47%	-2,28 p.p.	-
Total gross premium, UAH th.	36113,2	34050,5	2062,7	6,06%
Reinsurer’s share in gross premium, UAH th.	18820	26286,8	-7466,8	-28,41%
Reinsurance cover ratio, %	52,11%	77,20%	-25,09 p.p.	-
Payouts and indemnities, UAH th.	11927,7	1094,3	10833,4	989,98%
Payout ratio for the period, %	33,03%	3,21%	29,81 p.p.	-
Financial results, UAH th.	-1277,3	7531,2	-8808,5	-116,96%
ROS, %	-3,54%	22,12%	-25,65 p.p.	-
Net profit (loss), UAH th.	-2379,1	7684,5	-10063,6	-130,96%
ROE, %	-5,27%	17,63%	-22,90 p.p.	-

Source: Company data, RA Expert-Rating calculations

Results of insurer H1 2012 reports analysis:

1. In the period from 30.06.2011 to 30.06.2012 the assets of IC BUSIN grew from UAH 82,911 million to UAH 93,737 million, or on 13,06 %. Shareholders’ equity increased by 3,53 % for the same period. In result of advancing rates of liabilities growth over shareholders’ equity of the insurer, capitalization level of the company decreased from 110,81 % to 92,81 %. But even at such decrease the shareholders’ equity/liabilities ratio of IC BUSIN is high, that proves to good capitalization of the company.

2. As of 30.06.2012 cash means on company accounts have constituted UAH 40,928 million, that is on 20,35 % higher than the similar indicator as of 30.06.2011. Thus, the ratio liquid assets/liabilities of the company was 84,19 % as of 30.06.2012 that provides high level of liquidity and, according to the Agency, this indicator exceeds average market value.

3. In spite of the fact that the volume of insurer gross premiums in H1 2012 exceeds the volume of premiums for the same period of 2011 on 6,06 %, the volume of payouts in H1 2012 grew in 10,9 times compared with 2011 indicator. The given growth is connected with occurred large insured event in Q1 2012. As a result, company payout level grew from 3,21 % to 33,03 % that according to RA Expert Rating does not entail a threat for the financial strength of the insurer.

4. Following the results of H1 2012 the financial results from operations of the company made up UAH 1,277 million that is nearly in 5 times less than the same indicator following the results of Q1 2012. The given trend proves to that the Company in the near future will return to profitable activity. And accordingly, ROS and ROE indicators will change from negative to positive.

Proceeding from the analysis of IC BUSIN activity indicators, the Agency highlights that against negative return rates indicators the Company possesses high levels of capitalization and liquidity that puts the insurer to the category of reliable companies with good financial strength.

Analytical service of RA Expert-Rating

Confirmation of JSC IC Busin (full version) - 27.09.2012