Ratings Watch

Ingosstrakh upgrade

Moody's Investors Service has upgraded its insurance financial strength rating of Russia's Ingosstrakh Insurance Co.to Ba1 from Ba2 and assigned a stable outlook to the company. Moody's said the action reflected Ingosstrakh's reduced exposure to Soyuz Bank, as well as its sustained profitability and capitalization "in the context of a challenging operating environment and a rapidly growing market." Moody's noted that the rating could be improved as a result of a material improvement in the operating environment "evidenced by higher levels of operating profitability" such as a combined ratio of 95% consistently across the underwriting cycle, among other things.

Catalana assigned A

Fitch Ratings has assigned an insurer financial strength rating of A with stable outlook to Seguros Catalana Occidente, the largest operating insurance company of Grupo Catalana Occidente. Fitch said the ratings reflect the group's good business position in the Spanish life and nonlife markets "as well as its growing involvement in credit insurance activities, bringing some business and geographic diversification to both the group's revenue base and risk profile."

Munich Re America

A.M. Best Co. has affirmed the financial strength ratings of A for Munich Re America Corporation Group and its member companies. The ratings reflect the group's "solid returns and substantial improvement in risk-adjusted capitalization following last year's extensive recapitalization plan" executed by its ultimate parent Munich Re Group.

WÜrtt affirmed

A.M. Best Co. has affirmed its financial strength rating of B++ of Württembergische und Badische Versicherungs-A.G. It said the rating reflects the company's risk-adjusted capitalization which, it said, "remain supportive of the ratings despite the acquisition of Deutsche Versicherungs-und Ruckversicherungs-A.G." as well as the company's improving business profile and continued good operating performance. Drags on the rating include concern about the "investment horizon" of the company's sole shareholder, J.C. Flowers & Co. L.L.C.

Turkish delight

The Turkish insurance industry failed to live up to the high expectations, following deregulation in the early 1990s, although new opportunities are emerging, according to rating agency Fitch Inc.

While the Turkish market remains limited, with total premiums of just TRY7.8 billion, and in spite of intensified competition, new opportunities are arising for increased penetration, Fitch said.

"Companies are positioning themselves to benefit from the significant growth potential in the sector, across all lines in both life and nonlife markets—mirroring the improvements in the economy in general," Fitch said in its Turkey special report "The Turkish Insurance Sector".

In the report, the rating agency said that the major overhaul in terms of market shares, change of ownership and regulatory framework, currently taking place in Turkey, will "gradually" put the Turkish insurance sector on the path to sustained growth.

The Turkish sector is becoming more competitive with the entrance of foreign companies whose presence is increasing, the report added. As of the third quarter 2006, foreign ownership in the sector's total capital had reached 27%.

S&P affirms Groupama

Standard & Poor's Corp. has affirmed its A financial strength rating of French mutual insurer Groupama S.A. S&P said the rating reflected Groupama's leading competitive position in the French insurance market and its strong capitalization. Partly offsetting those factors, S&P noted, are the company's high operating expenses and heavy reliance on the French nonlife sector.