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IBI-Rating has affirmed the credit rating of «UPSC» PrJSC at uaAA grade
26.03.2020
Rating agency IBI-Rating informs on affirming of the long-term credit rating of «UPSC» PrJSC at uaAA grade, with a «stable» outlook.
«UPSK» PrJSC has been working in the insurance market since 1992. The majority shareholder and Chairman of the supervisory board is Mykhailov Oleksandr. The insurer is a member of the Motor (Transport) Insurance Bureau of Ukraine. The company holds 36 licenses for carrying out insurance business (20 types of voluntary insurance, 16 types of compulsory insurance). Despite the strong competition in the Ukrainian insurance market, «UPSK» PrJSC demonstrates a relatively stable position among more than 200 participants of the insurance market (non-life), entering in the TOP 20 market leaders in terms of key indicators: the amount of insurance reserves, assets, equity, premiums raised and payments made. Also, in the long-term period, the «UPSK» PrJSC occupies the third position in the volume of insurance premiums for compulsory insurance of civil liability of owners of land vehicles. The insurer has a sufficiently developed regional network, which is located in all oblasts of Ukraine. In addition, the company is represented by about 1000 branches of sale the insurance products and customer service centers which are operating on the basis of agency agreements.
The positive factors of the insurer's activity should include a substantial stock of assets that may be represented by insurance reserves. Moreover, the assets allocation, which are formed by insurance reserves, is assessed as acceptable. Additionally, it should be noted that the diversification of bank deposits in the context of banking institutions (including state-owned) is sufficient, indicated banks have determined the credit ratings that correspond to the high investment level of the national rating grade. In turn, an increase in administrative, service and other expenses related to the recognition of losses in previous years (as required by IFRS) has had a negative impact on the performance of the company. Thus, according to the results of 2019, the combined loss ratio was 102.7%, and the net financial result was negative (UAH -58.4 million).
The affirming of the long-term credit rating is due to the company becoming one of the largest participants in the Ukrainian insurance market, stable dynamics of the amount of earned insurance premiums, acceptable diversification of the insurance portfolio, high quality and sufficient diversification of assets, which are represented by insurance reserves. In turn, the Rating Agency notes the company's unprofitable main activity according to the results of 2019, the high value of the combined indicator of loss, increasing the sensitivity of Ukraine's financial system to operational and other risks, due to the deteriorating epidemiological situation in the country, as well as the introduction of economic and administrative constraints for companies and population. At the same time, it should be noted that the Insurer has a good quality of reinsurance operations, high quality of insurance claims settlement, availability of a wide client base, high level of insurance contracts prolongation, as well as well-developed sales channels, what contributing a stable dynamics of insurance payments.
In order to conduct the analytical research the materials provided by «UPSK» PrJSC have been used, including: annual financial statements for 2017-2019, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.
Financial department
For additional information please contact:
Press office of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua
«UPSK» PrJSC has been working in the insurance market since 1992. The majority shareholder and Chairman of the supervisory board is Mykhailov Oleksandr. The insurer is a member of the Motor (Transport) Insurance Bureau of Ukraine. The company holds 36 licenses for carrying out insurance business (20 types of voluntary insurance, 16 types of compulsory insurance). Despite the strong competition in the Ukrainian insurance market, «UPSK» PrJSC demonstrates a relatively stable position among more than 200 participants of the insurance market (non-life), entering in the TOP 20 market leaders in terms of key indicators: the amount of insurance reserves, assets, equity, premiums raised and payments made. Also, in the long-term period, the «UPSK» PrJSC occupies the third position in the volume of insurance premiums for compulsory insurance of civil liability of owners of land vehicles. The insurer has a sufficiently developed regional network, which is located in all oblasts of Ukraine. In addition, the company is represented by about 1000 branches of sale the insurance products and customer service centers which are operating on the basis of agency agreements.
The positive factors of the insurer's activity should include a substantial stock of assets that may be represented by insurance reserves. Moreover, the assets allocation, which are formed by insurance reserves, is assessed as acceptable. Additionally, it should be noted that the diversification of bank deposits in the context of banking institutions (including state-owned) is sufficient, indicated banks have determined the credit ratings that correspond to the high investment level of the national rating grade. In turn, an increase in administrative, service and other expenses related to the recognition of losses in previous years (as required by IFRS) has had a negative impact on the performance of the company. Thus, according to the results of 2019, the combined loss ratio was 102.7%, and the net financial result was negative (UAH -58.4 million).
The affirming of the long-term credit rating is due to the company becoming one of the largest participants in the Ukrainian insurance market, stable dynamics of the amount of earned insurance premiums, acceptable diversification of the insurance portfolio, high quality and sufficient diversification of assets, which are represented by insurance reserves. In turn, the Rating Agency notes the company's unprofitable main activity according to the results of 2019, the high value of the combined indicator of loss, increasing the sensitivity of Ukraine's financial system to operational and other risks, due to the deteriorating epidemiological situation in the country, as well as the introduction of economic and administrative constraints for companies and population. At the same time, it should be noted that the Insurer has a good quality of reinsurance operations, high quality of insurance claims settlement, availability of a wide client base, high level of insurance contracts prolongation, as well as well-developed sales channels, what contributing a stable dynamics of insurance payments.
In order to conduct the analytical research the materials provided by «UPSK» PrJSC have been used, including: annual financial statements for 2017-2019, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.
Financial department
For additional information please contact:
Press office of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua