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

Today, only 4 Russian companies possess long-term issuer rating of ‘BB+’: Gazprom (positive outlook), Norilsk Nikel (stable), Transneft (stable) and Impexbank (positive). Ingosstrakh became the only Russian insurer to receive such high ratings of Standard & Poor’s.

As Alexander Grigoriev, Director General of Ingosstrakh, noted, positive upgrade of the company’s rating is linked to its dynamic development, improvement of its financial strength and reliability, optimization of its business processes, enhancement of methodology to assess insurance, credit and currency risks, increase in the quality of management.

Standard & Poor’s report says that the upgrade reflects Ingosstrakh’s considerable improvement in the investment profile and positive track record by company’s management team. The ratings show progressive strengthening of company’s competitive advantages in Russia through intensive growth of its personal lines portfolio and sustained high indicators of business profitability.

Major factors, determining ratings, are the following:

• 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.
• Effective management. Ingosstrakh top-management strengthened its positions and Standard and Poor’s is highly confident in top-management’s ability to achieve ambitious goal of turning Ingosstrakh into Russian universal operator.
• High profitability of business.
• Strong competitive advantages in Russia. In Russian insurance market, Ingosstrakh unconditionally possesses competitive advantages due to its gained long-term experience in domestic and global markets. Company is the leader in the segments of commercial insurance and reinsurance, and also occupies solid place in the personal insurance market.

Moreover, Standard & Poor’s report says that Ingosstrakh’s existing financial status allows it to ensure expected business growth in 2006 by using its own funds. Agency also positively evaluates Ingosstrakh’s ability to attract additional resources from capital market, if it sees it necessary, in order to achieve high target growth indicators and position of Number One universal insurer in Russia.

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 believed that the stable outlook reflects expectation of Ingosstrakh’s sustainable good operating performance. In particular, if company manages to maintain ROE at not less than 15%, it will further improve quality of the investment portfolio, and maintain capital adequacy according to Standard & Poor’s risk-based capital model, within the ‘BBB’ range.

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

OJSIC Ingosstrakh (www.ingos.ru) operates in international and domestic insurance market since 1947. The company is one of the leaders in the amount of premium from voluntary non-life insurance.

Ingosstrakh has been rated Moody’s Investors Service (Ba2/Positive), Moody’s Interfax Rating Agency (Aa2.ru and RUS-1 on the national scale), and Expert RA (A++).

Total amount of direct insurance and reinsurance premium collected by OJSIC Ingosstrakh, IC Ingosstrakh-M Ltd, and IC Ingosstrakh LMT Ltd for 2005 amounted to Rub 30.9 bln, 53.8% more than in 2004. Claims settled accounted for Rub 13.9 bln. Assets increased 30.4% and totaled Rub 33.1 bln. Equity capital – Rub 6.5 bln as of January 1, 2006.

Ingosstrakh is licensed to perform all twenty insurance classes (insurers’ specialty), stipulated by Article 32.9 of Insurance Law and reinsurance. Company has branches in 182 Russian cities, and over 15 offices and subsidiaries in neighboring and other foreign countries.