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RA «Expert-Rating» confirms the financial stability rating of OJSC “Transsib Re” at the level uaAAA


02/12/2011

December 02, 2011 the Agency confirms the financial stability rating of OJSC Transsiberian Re (The Russian Federation) at the level uaAAA. This confirmed rating means the highest level of the reinsurer’s financial stability according to the national Ukrainian scale. When giving the positive conclusion concerning the highest level of the reinsurer’s financial stability, RA “Expert-Rating” was based on the key results of the Company’s activity for the 9 months of 2011.

Table

Key performance indicators of OJSC «Transsiberian Re»

Indicators

9 months of 2011

9 months of 2010

Change

Growth rate, %

Total assets, mln. RUB

1335

1125

210

18,67%

Shareholders’ equity, mln. RUB

602

378

224

59,26%

Total liabilities, mln. RUB

733

747

-14

-1,87%

Shareholders’ equity/ Total liabilities ratio, %

82,13%

50,60%

31,53 p.p.

-

Cash and cash equivalents, mln. RUB

280

300

-20

-6,67%

Cash and cash equivalents/ Total liabilities ratio, %

38,20%

40,16%

-1,96 p.p.

-

Total gross premiums, mln. RUB

456

537

-81

-15,08%

Insurance premiums sent to reinsurers, mln. RUB

140

129

11

8,53%

Insurance premiums sent to reinsurers/ Gross premiums ratio, %

30,70%

24,02%

6,68 p.p.

-

Insurance benefits and reimbursements, mln. RUB

231

346

-115

-33,24%

Insurance benefits and reimbursements/ Gross premiums ratio for the period, %

50,66%

64,43%

-13,77 p.p.

-

Financial result from operating activities, mln. RUB

73

60

13

21,67%

ROS, %

16,01%

11,17%

4,84 p.p.

-

Net profit (loss), mln. RUB

19

16

3

18,75%

ROE, %

3,16%

4,23%

-1,08 p.p.

-

Source: data of the Company, calculations by RA «Expert-Rating»

1. Company’s assets have grown by 18,7%, shareholders’ equity – by 59,3% for the period from 01.10.2010 to 01.10.2011. The growth rates of the Company’s shareholders’ equity have exceeded the growth rates of assets, that’s why its Shareholders’ equity/ Total liabilities ratio has grown from 50,6% to 82,1%, at the same time total liabilities of OJSC “Transsib Re” have reduced by 1,9%. The growth of Shareholders’ equity/ Total liabilities ratio reduces the credit risks of the Company and positively affects its financial stability.

2. Despite the reduction of Cash and cash equivalents/ Total liabilities ratio from 40,2% to 38,2%, the liquidity rate of OJSC “Transsib Re” remains significant, most of the investment portfolio of the insurer is represented in shares, which are among the blue chips traded at the RTS and MICEX.  According to the Agency the Company’s liquidity remains sufficient for meeting current liabilities of the reinsurer. As of 01.10.2011 there have been RUB 280 mln. (USD 8,72 mln.) at the accounts of OJSC “Transsib Re”.

3. Gross premiums of OJSC “Transsib Re” have constituted RUB 456 mln. for the 9 months of 2011 that is by 15,1% less than for the same period of 2010. Reinsurers’ share in gross premiums has grown from 24% to 30%, and Insurance benefits and reimbursements/ Gross premiums ratio has decreased from 64,4% to 50,7%. Insurance benefits and reimbursements have reduced by 33,2%. The Corporation has made payments in the 1267 insurance claims for the three quarters of current year that is slightly more than for the same periods of previous years. These performance indicators of the reinsurer have followed the tendencies of the Russian insurance market. The reduction in insurance benefits has enabled to increase the company’s profitability in 2011.

4. The structure of OJSC “Transsib Re” portfolio remains stable during the last years and according to the 9 months of 2011 this portfolio looks as follows:

  • 83,1 % (RUB 378,7 mln) account for reinsurance contracts of property insurance;
  • Proportion in reinsurance liability amounts to 11% (RUB 50,3 mln.);
  • Fees for reinsurance contracts of personal insurance — 5,1 % (RUB 23,3 mln.);
  • 0,8 % (RUB 3,1 mln.) — receipts for reinsurance of business and financial risks.

The proportion in receipts of auto insurance has reduced from 44% to 15% in the portfolio of “Transsib Re” in comparison to the same period of 2010 and premiums of this insurance type have decreased by RUB 165 mln. The decline in this business is caused by its high unprofitability. The reduction of Casco’s share in the portfolio will increase the financial stability of the Company.

5. Starting with 2003, premiums received by “Transsib Re” from abroad constantly exceed the fees at the Russian market. This tendency has been preserved according to the three quarters of 2011: the amount of reinsurance payments received from non-residents (insurance companies and brokers) has constituted 57% in the portfolio of the Corporation. “Transsib Re” has concluded the 3376 reinsurance contracts for the 9 months of 2011 that corresponds to the indicator of last year.

6. Financial result from operating activities of OJSC “Transsib Re” has constituted RUB 73 mln. according to the three quarters of 2011 that is by 21,7% more than the same period of last year. In total, ROS of the reinsurer has grown by 4,8 p.p. Net profit has constituted RUB 19 mln. for the 9 months of 2011 that is by 18,8% more than for the 9 months of 2010. But ROE has reduced by 1,1 p.p. due to the rise of shareholders’ equity.

 

Analytical department of RA «Expert-Rating»

Full confirmation of OJSC “Transsib Re” (english version) - 02.12.2011

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