Credit rating confirmed and forecast improved for the Insurance Company «Universalna»2007-04-17
uaВВВ rating has been confirmed for OJSC «Insurance Company «Universalna». It was announced by the independent rating agency «Credit Rating».
Borrower rating «uaBBB» reflects a sufficient ability of the borrower to execute its debt commitment in the framework of Ukrainian financial market in time and in full volume, although such a borrower is more sensitive to the effect of unfavourable changes in commercial, financial and economic conditions than borrowers with a higher rating.
At the same time, rating forecast has improved from stable to positive. A positive forecast points to the possibility of rating rise over the year provided positive tendencies are maintained and current risks are leveled.
«The rise is due to the stable indices of company’s activity, the growth of insurance payments and company’s timely fulfillment of obligations for interest payment to investors» , said Olena Velyka, Director for Strategic Planning and Investment Policy Department. – «The positive forecast of the credit rating let us hope for further rating rise of company’s debt instrument to the uaA level».
Factors maintaining the credit rating level of «Universalna» company:
- In 2006 OJSC «Insurance Company «Universalna» attracted insurance payments (including payments due for reinsurers) to the total amount of UAH 169,804.2 ths., which exceeds the amount for 2005 by 16.9%.
- In general, the insurance portfolio of OJSC «Insurance Company «Universalna» is sufficiently balanced according to both gross insurance payments and net insurance payments (not including payments due for reinsurers).
- The amount by which actual solvency reserve exceeds the expected one increased during the 4th quarter of 2006 and constituted UAH 81,683.5 ths. on January 1, 2007, which is 4 times as much (on October 10,2006 it was 3.87 times as much), which points to a considerable potential of additional payments attraction and withholding risks.
- The company managed to almost double its net profit. It was possible due to successful financial results of its basic activity (UAH 9,769.8 ths.), which is by 55.7% more than in 2005 and by 14.9% more than in the 3rd quarter. In terms of company’s intensive business development and the objective rise of administrative and other expenses, the net profit increase affirms that financial and insurance control units are well balanced in the structure of the company.
In order to conduct rating analysis company «Credit Rating» used all financial records of the insurance company for 2002-2006 and internal information provided by OJSC «Insurance Company «Universalna» in the course of rating process.