IBI-Rating has affirmed the financial strength rating of PJSC «NJSIC «ORANTA» at uaAA–ifr grade

Rating agency IBI-Rating informs on affirming of the financial strength rating of PJSC «NJSIC «ORANTA» at uaAA–ifr grade, with a «stable» outlook.

The affirmed grade of the financial strength rating of PJSC «NJSIC «ORANTA» is due to the company’s being one of the largest players in the insurance market of Ukraine, sufficient level of highly liquid assets in the categories of assets, which represent insurance reserves, as well as decreased sensitivity of the Insurer to market risk due to reduced investments in securities as well as sufficient solvency indicators. Also Rating Agency notes an increase in the volume of earned insurance premiums and absence of debt burden in the form of bank loans or debt on the placed debt securities. In turn, there is low diversification of the insurance portfolio, unprofitable activity in the results of previous year and 3 months of 2018, a high share of reserves of declared but not paid losses, in general insurance reserves, as well as the high value of the combined loss ratio.

PJSC «NJSIC «ORANTA» is the legal successor of Ukrgosstrakh, founded on November 25, 1921. In 1993, Ukrgosstrakh was transformed into the Public Joint-Stock Company «National Joint-Stock Insurance Company «Oranta», the founder of which was the State Property Fund of Ukraine. In 2007, the State Property Fund of Ukraine sold to the investor the last shareholding which was in state ownership. As of the 01.04.2018, the shareholders of PJSC «NJSIC «ORANTA», which have more than 10% of the shares, are JSC «BTA Bank» (Kazakhstan – 35.17% of shares), as well as company registered in the Republic of Cyprus - BACKWOOD HOLDINGS LIMITED (13.74%).

The insurer activities basis on the 33 licenses - 15 mandatory and 18 voluntary types of insurance. Following the results of 2017, PJSC «NJSIC «ORANTA» occupied such positions among more than 271 participants of the insurance market (non-life): assets - 12th place; own capital - 15th place; insurance reserves and payments - 10th place; insurance premiums - 14th place. In addition, PJSC «NJSIC «ORANTA» stably ranks first in terms of the volume of insurance premiums for compulsory insurance of civil liability of owners of land vehicles. In the analyzed period, the result of the main activity of the insurer remained being negative, which was due to the growth of the loss-making auto insurance, significant costs in the form of commission insurance agents, as well as the cost of creating reserves of doubtful debts. The net loss of PJSC «NJSIC «ORANTA» in the results of 2017 and I quarter of 2018 amounted to UAH 4.6 million and UAH 32.4 million, respectively.

In order to conduct the analytical research the materials provided by PJSC «NJSIC «ORANTA» have been used, including: the annual financial statements for 2015-2017 and 3 months of 2018, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.

Financial department
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