The credit rating of JSC IC Allianz (hereinafter, the Company) is based on the very high likelihood of the parent company, which is characterized by high creditworthiness, providing extraordinary support. The Company has a high standalone creditworthiness assessment (SCA), a moderately strong business profile, strong financial profile and high quality corporate governance.

JSC IC Allianz is a universal insurance company that is part of Allianz Group, a global insurance group. Allianz SE, which ACRA views as the supporting entity (hereinafter, the Supporting Entity, or the SE) in accordance with the Methodology for Analyzing Rated Entities Associated with a State or a Group, owns a 100% stake in JSC IC Allianz. JSC IC Allianz provides insurance services to legal entities and individuals, including via its subsidiaries — Allianz Life Insurance Company, Ltd. and Insurance Company “Medexpress”.

Key rating assessment factors

Moderately strong business profile. As of the end of 2020, the Company’s market share together with its subsidiaries was 1.3%. The Company’s strongest positions are in the voluntary health insurance (sixth in terms of total insurance premiums, market share is 5.8%) and life insurance (ninth place, market share is 1.3%) segments. A significant share of the Company’s business is related to providing insurance services in Russia to the international clients of Allianz Group, and is related to carrying out fronting operations in the interests of other companies in the Allianz Group.

The diversification of the Company’s client base is limited due to the high concentration of clients in Moscow and Saint Petersburg. Diversification of sales channels is high as the Company works with a large number of agents and brokers, and enters into contracts without intermediaries.

ACRA views the quality of the Company’s product line as above average because the Company can utilize the underwriting capabilities of the SE and offer its clients coverage against a wide range of insurance risks. At the same time, the Company’s strategic decision to not provide the majority of types of retail insurance, including vehicle insurance and driver liability insurance, has a negative impact on the quality of the product line.

ACRA assumes that in the medium term, the growth rate of the Company’s insurance premiums will be in line with the market average. At the same time, the Agency expects the combined ratio for insurance operations (other than life insurance) as well as the return on life insurance assets, to be at levels that are comfortable for the Company.

The strong financial profile is based on high capital adequacy, high asset quality, and strong liquidity. This is due to the Company’s conservative policy with regard to insurance risk and asset-related risks.

The ratio of available capital to capital at risk, assessed using ACRA’s methodology, is at a very high level. Along with the Company’s stable access to sources of capital, this determines the high capital adequacy.

The assessment of asset quality is high because the Company invests primarily in low-risk assets. In addition, the ratio of capital to assets is sufficiently comfortable (0.24 as of December 31, 2020).

The Company’s strong liquidity is based on the high assessments of liquidity ratios. As of December 31, 2020, the short-term and long-term liquidity ratios of the Company were 2.7 and 1.3, respectively.

Management quality is assessed as high because the Company’s key functions are integrated into the group management system and based on international best practices.

Very high likelihood of provision of extraordinary support from the parent company. In ACRA’s opinion, if necessary the Supporting Entity will provide sufficient long-term and short-term financing to the Company and perform capital injections in light of the following:

  • The Russian market is important to Allianz Group in the context of its global presence strategy, and also due to high growth potential;
  • Deep operational integration between the Company and the SE (the Company’s governance standards, risk management system, strategic planning and internal control are all determined in line with the SE’s approaches);
  • Allianz Group provides reinsurance coverage for all types of insurance risks in the Company’s portfolio;
  • A potential default of the Company would result in significant operating and financial risks for Allianz Group;
  • The Company has received financing from the SE in the past: in 2014–2015, the Company received RUB 5.6 bln in financial assistance from Allianz SE.

Taking the above factors into account, the credit rating of the Company is determined as on par with the Russian Federation.

Key assumptions

  • Allianz Group maintaining shareholder and operational control;
  • The Company maintaining its strategy for the Russian market.

Potential outlook or rating change factors

The Stable outlook assumes that the rating will most likely stay unchanged within the 12 to 18-month horizon.

A negative rating action may be prompted by:

  • Loss of shareholder or operational control by Allianz Group and its reduced propensity to support the Company;
  • Lower strategic importance of the Company for  Allianz Group;
  • Significant decline in the creditworthiness of the SE.

Rating components

SCA: аa-.

Adjustments: none.

Support: parity with the RF.

Issue ratings

There are no outstanding issues.

Regulatory disclosure

The credit rating has been assigned under the national scale for the Russian Federation based on the Methodology for Assigning Credit Ratings to Insurance Organizations on the National Scale for the Russian Federation, the Methodology for Analyzing Rated Entities Associated with a State or a Group, and the Key Concepts Used by the Analytical Credit Rating Agency within the Scope of Its Rating Activities.

A credit rating has been assigned to JSC IC Allianz for the first time. The credit rating and its outlook are expected to be revised within one year following the publication date of this press release.

The credit rating was assigned based on data provided by JSC IC Allianz, information from publicly available sources, and ACRA’s own databases. The rating analysis was performed using the GAAP statements of JSC IC Allianz. The credit rating is solicited, and JSC IC Allianz participated in its assignment.

In assigning the credit rating, ACRA used only information, the quality and reliability of which was, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.

ACRA provided no additional services to JSC IC Allianz. No conflicts of interest were discovered in the course of credit rating assignment.

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