IBI-Rating has downgraded the credit rating of «A» series bonds of «DOM STRAHOVANIE» INSURANCE COMPANY» PrJSC to uaBBB- grade, keeping the «negative» outlook

Rating agency IBI-Rating informs on downgrading the credit rating of «A» series bonds of «DOM STRAHOVANIE» INSURANCE COMPANY» PrJSC to uaBBB- grade, wihg the «negative» outlook. The rating is saved in the Credit Watch List.

The rating actions are caused by the increase in the sensitivity of the insurance company to prudential risks which is due to the adoption of orders of the National Financial Services Commission for the cancellation of certain licenses for the performance of insurance activities to these insurers. Now the order is challenged by the insurer in court. In particular, on December 12, 2017, the District Administrative Court of Kyiv was found unlawful and the order of the National Securities and Stock Market Commission of a license for carrying out insurance activities was revoked. The State Regulatory Service of Ukraine was involved in the litigation process.

As well, the following marks have had taken into account under updating the credit rating of A series bonds of «DOM STRAHOVANIE» INSURANCE COMPANY» PrJSC: high rates of capitalization and solvency, positive dynamics of earned insurance premiums, and that the company is into the number of insurance market leaders by the speed of settlement of insured cases. In turn, the constraining factors in the development of the company are: significant amount of assets with an increased risk of lower liquidity (which may lead to a deterioration in the financial result); decrease in asset diversification, which represents insurance reserves; as well preservation of the difficult situation in the economy, which limits the financial capacity of the population and enterprises of the real sector and adversely affects the level of confidence in financial institutions.

«DOM STRAHOVANIE» INSURANCE COMPANY» PrJSC has been working in the insurance market since 1994 and is the successor of «IC «DNEPRINMED» PJSC. As of the beginning of October 2017, the shareholders of the insurance company are 11 individuals - residents of Ukraine, the share of none of them exceeds 10% of the authorized capital. The insurance company is a member of the Motor (Transport) Insurance Bureau of Ukraine and operates on the basis of 24 licenses - 8 compulsory and 16 voluntary types of insurance. In the period under review, the strategic types of insurance for the insurer were: medical insurance (40% of all receipts for 9 months of 2017), transport insurance (MTPL, motor insurance, green card) - about 14% of premiums, property insurance (19%) and fire insurance (15.5%).

Decision on the issue of registered interest-bearing unsecured A series bonds for the amount UAH 100 mln. was adopted on July 16, 2011 at the general meeting of shareholders of the insurance company. The maturity of the bonds is July 28, 2021. The goal of the bond issue is to expand the territorial divisions, the agent network,implementation of corporate IT-systems, develop and implement of the new insurance products.

In order to conduct the analytical research the materials provided by «DOM STRAHOVANIE» INSURANCE COMPANY» PrJSC have been used, including: annual financial statements for 2014-2016 years and for 9 months of 2017, 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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