(The following statement was released by the rating agency)
LONDON, August 04 (Fitch) Fitch Ratings has downgraded ACE
CJSC (Russia)'s (ACE Russia) Insurer Financial Strength (IFS)
rating to 'BBB'
from 'BBB+'. The Outlook is Negative. Fitch has also affirmed
National IFS rating at 'AAA(rus)' with Stable Outlook.
KEY RATING DRIVERS
The downgrade of ACE Russia's IFS follows the downgrade of the
Federation's (Russia) Country Ceiling to 'BBB' from 'BBB+'. This
reflects Fitch's view that, although the Russian authorities
maintain an open capital account, sanctions from and
with the EU and US pose risks to Russia's financial integration
with the rest of
the world, increasing transfer and convertibility risk.
ACE Russia is part of ACE Group, a global insurer and reinsurer.
parent of the group is ACE Limited, domiciled in Switzerland
Fitch continues to view ACE Russia's as "Important" to the ACE
Group under its
approach to rating insurance groups. This reflects the deep
operations, shared brand name, track record of support and
governance and risk management procedures. The inclusion of a
portion of local risks in ACE Russia's portfolio from
that are also ACE Group's worldwide clients supports this view.
However, the company's small size relative to the group
precludes the strategic
importance from being assessed as "Very Important", and support
from the parent
is informal rather than provided through a formal support
Russia's rating therefore reflects partial attribution of ACE
On a standalone basis, ACE Russia would be rated more than six
notches below its
The Negative Outlook on ACE Russia's IFS mirrors the Negative
Russia's 'BBB' Long-term local currency IDR.
A downgrade of Russia's Long-term local currency IDR is likely
to lead to a
corresponding downgrade of ACE Russia's IFS rating. Conversely,
revision of the
Outlook on Russia's Long-term local currency IDR to Stable could
similar rating action on ACE Russia.
If a formal support agreement were to be introduced between ACE
Limited and ACE
Russia, ACE Russia's ratings could be upgraded. Conversely,
Fitch would view any
decline in the level of parent support to the insurer as a
trigger for a
If ACE Russia maintains sustainable and profitable growth and
achieves a more
material scale relative to ACE Group, the IFS rating could be
Fitch does not expect this in the near or medium term.
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Additional information is available on www.fitchratings.com.
Applicable criteria, 'Insurance Rating Methodology', dated 13
November 2013, are
available at www.fitchratings.com.
Applicable Criteria and Related Research:
Insurance Rating Methodology
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