Standard & Poor’s Ratings Services raised its long-term counterparty credit and insurer financial strength ratings on Ingosstrakh to ‘BBB-’ from ‘BB+’ (stable outlook) and affirmed Russia national scale rating at ‘ruAA+’.

Today, only four Russian companies possess long-term issuer rating of ‘BBB-’: LUKOIL (stable outlook), Norilsk Nikel (stable), Gazprombank (stable) and International Moscow Bank (stable). Ingosstrakh has become the only Russian insurer to receive such high rating of Standard & Poor’s.

Ratings upgrade reflects Ingosstrakh’s successful strategy realization aimed at international quality standards implementation in the insurance operations and corporate management, company’s dynamic development, business processes streamlining, sales infrastructure advancement, and investment strategy quality increase. Recently, Ingosstrakh has achieved firm positions in the retail market segment. Additional strength and sustainability added by diversification due to operations abroad.

Standard & Poor’s reports that the upgrade reflects a noticeable improvement in Ingosstrakh’s investment profile and a positive track record by company’s management team. Ratings reflect progressive strengthening of the company’s competitive advantages in Russia through intensive growth of its personal lines portfolio and a sustained good level of operating performance.

Major factors, determining ratings, are the following:

• Ingosstrakh’s strong investment strategy enabling portfolio diversification by investment objects, risks, as well as national and foreign currencies.
• High-quality management. Standard & Poor’s is highly confident in top-management’s ability to achieve ambitious goal of turning Ingosstrakh into Russia’s leading universal operator.
• Considerable improvement of investment profile quality. By investment activities’ standards, Ingosstrakh outclass other Russian insurance companies. Company’s investment portfolio is diversified by types of instruments, currencies and risks. Quality of portfolio was considerably improved and approaches the international financial strength standards.

Moreover, current Ingosstrakh’s financial standing, in Standard & Poor’s opinion, enables company to finance expected growing business in 2007. However, to achieve the goal – becoming the leading universal operator in Russia – company will need capital injections. Major stakeholders had repeatedly demonstrated its focus on company’s support, allowing capital injections, and express their readiness to provide financial support in the future, if necessary.

Standard & Poor’s stressed that ratings were considerably influenced by high industrial and country risks. Country risks’ factors, widely distributed in Russia, increase operational and financial risks, which in turn affect financial market players. However, as result of long-term work in the international insurance markets, Ingosstrakh possesses much more developed infrastructure, than its Russian counterparts, thus enabling it to cope with some of such risks.

Standard & Poor’s experts believe that stable outlook reflects the expectation of company’s sustained good operating performance (total combined net-loss ratio at less than 100% and equity profit at 15%) and ability to maintain capital adequacy indicators (calculated accordingly to S&P risk-base model) at ‘BBB’ rating category. In the medium term, Ingosstrakh still faces “challenges” to maintain its capitalization in line with its ambitious growth levels and the execution risk by increasing its premium income by 2009 to $1.8-2.5 bln.

Ingosstrakh’s rating list (Standard & Poor’s)

OJSIC Ingosstrakh (www.ingos.ru) operates in the global and national insurance markets since 1947. The company is one of the leaders in the amount of premiums from voluntary non-life insurance.

Ingosstrakh has been rated by Moody’s Investors Service (Ba1/Stable), Moody’s Interfax Rating Agency (Aa1.ru on the national scale), and Expert RA (A++).

Ingosstrakh is licensed to perform all insurance classes (insurers’ specialty), stipulated by Article 32.9 of Insurance Law and reinsurance. Company has branches in 214 Russian cities. 14 rep offices and subsidiaries operate in neighboring and other foreign countries.