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RATING CONCLUSION On assigning the rating at the level uaAA to IC “PROSTO-insurance”


16/01/2014

January 15, 2014 at the meeting of Rating committee of RA “Expert-Rating” it was decided to assign the financial stability rating of the insurer JSC “PROSTO-insurance” at the level uaAA according to the national scale. The insurer with rating uaAA is characterized by a very high financial stability compared to other Ukrainian insurance companies. Assigning the rating at such high level, the Agency was guided by the conclusions on the analysis of the Company’s activity in the 9 months of 2013.

Table

Key performance indicators of JSC «PROSTO-insurance»

in the 9 months of 2013 года (th. UAH, p.p., %)

Indicators

9 months of 2013 (30.09.2013)

9 months of 2012 (30.09.2012)

Change

Growth rate, %

Total assets, th. UAH

210343

214193

-3850

-1,80%

Shareholders’ equity, th. UAH

79983

100128

-20145

-20,12%

Gross liabilities, th. UAH

130360

114065

16295

14,29%

Shareholders’ equity/Liabilities ratio, %

61,36%

87,78%

-26,43 p.p.

-

Cash and cash equivalents, th. UAH

67349

65946

1403

2,13%

Cash and cash equivalents/ Liabilities ratio, %

51,66%

57,81%

-6,15 p.p.

-

Total gross premiums, th. UAH

159128,6

148190,3

10938,3

7,38%

Proportion of insurance premiums, belonged to the reinsurers, th. UAH

3662,6

7547,5

-3884,9

-51,47%

Insurance premiums, belonged to the reinsurers/Gross premiums ratio, %

2,30%

5,09%

-2,79 p.p.

-

Insurance indemnities and reimbursements, th. UAH

60574,9

56265,2

4309,7

7,66%

Insurance indemnities/Gross premiums ratio for the period, %

38,07%

37,97%

0,10 p.p.

-

Financial result from operating activities, th. UAH

3873

3513

360

10,25%

ROS, %

2,43%

2,37%

0,06 p.p.

-

Net profit (loss), th. UAH

590

136

454

333,82%

ROE, %

0,74%

0,14%

0,60 p.p.

-

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

1. Gross premiums of JSC “PROSTO-insurance” have amounted to UAH 159,129 mln in the 9 months of 2013 that is by UAH 10,938 mln or by 7,38% more, than the same indicator of 2012. At the same time, the proportion of reinsurers in gross business of the Company has significantly decreased: from UAH 7,548 mln down to UAH 3,663 mln, or by 51,47%. The Agency assesses the market share of the insurer in the Ukrainian market at the level up to 1%. The Company acts a noticeable role in the retail segment of the insurance market.

The Company has paid UAH 60,575 mln in the first three quarters of 2013 and as a result the level of payments has amounted to 38,07% in the analyzed period.

2. In the period from 30.09.2012 to 30.09.2013 assets of the insurer have slightly decreased (by 1,8%) and as of the beginning of the fourth quarter of 2013 have amounted to UAH 210,343 mln. Shareholders’ equity has decreased from UAH 100,128 mln down to UAH 79,983 mln, or by 20,12%, while gross liabilities have grown by 14,29% and on 30.09.2013 its amount has amounted to UAH 130,36 mln. Due to the faster growth rates of liabilities over shareholders’ equity, the capitalization ratio has decreased by 26,43 p.p. and at the end of the Q3 of 2013 has amounted to 61,36%. This indicator corresponds to the acceptable level of the insurer’s capitalization. However, in the second part of 2013 the Company’s shareholders announced about that the authorized capital of the insurer would be increased up to UAH 123,9 mln that increases the reserve of the company’s equity and would positively affect the level of its solvency.

3. As of 30.09.2013 cash of JSC “PROSTO-insurance” has amounted to UAH 67,349 mln that is by 2,13% more, than the same indicator on 30.09.2012. Since gross liabilities of the insurer have grown by 14,29% in the last 12 months, the ratio of cash to liabilities of the Company has decreased only by 6,15 p.p. down to 51,66% that indicates the acceptable level of liquidity. The reserve of liquid assets with small reserve covers the whole amount of the nine month payments.

4. According to the results of the first three quarters of 2013 there is a noticeable improvement of income indicators of JSC “PROSTO-insurance”. Thus, the financial result from operating activities of the insurer has amounted to UAH 3,873 mln in the 9 months of 2013 that is by 10,25% higher than the result of 2012. Net profit of the Company has grown in 4,34 times: from UAH 136 th. up to UAH 590 th. in the 9 months of 2013 compared to the 9 months of 2012. Indicators of return have also demonstrated the growth.

5. JSC «PROSTO-insurance» enters the Group PECO, which was created in 2004. As of today more than 20 companies, working in the insurance, pension and leasing business in Russia and CIS, enter its composition.

Assets of the Group PECO, among others, include the controlling block of OIJSC “PECO-Guarantee” – the universal insurance company created in 1991. OIJSC “PECO-Guarantee” has a license of more than 100 types of insurance services and the reinsurance activity, enters the TOP-4 of insurers of The Russian Federation. Branch network of OIJSC “PECO-Guarantee” – one of the largest in Russia – includes more than 800 branches and sales offices in all the regions of RF. In the opinion of RA “Expert-Rating” the beneficiaries of JSC «PROSTO-insurance», if necessary, can provide a considerable financial support. The Agency assesses the support level from the shareholders of JSC «PROSTO-insurance» as significant.

 

Analytical service of RA «Expert-Rating»

Rating conclusion of JSC “PROSTO-insurance” (english version) - 15.01.2014

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