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JSC IC BUSIN rating report updated


17/06/2009

On June, 15th Rating Agency ‘Expert Rating’ published the updated rating report of JSC IC BUSIN. The report contains the analysis of company operations in 2008. The analytical service of the Agency notes that in 2008 the company BUSIN along with increase of gross premiums volumes did also improve indicators of customer and geographical diversification.

By results of rating research following basic conclusions may be drawn:
1. JSIC BUSIN takes an essential share of aviation risks insurance market, the insurance company serves the majority of large airlines of Ukraine, including Ukraine International Airlines, etc. Geography of flights of the airlines served by JSIC BUSIN is global and has no strict geographical binding or direction.
2. Specialization on aviation risks insurance affects negatively the level of diversification of the insurance
business of the company and to some extent puts the successfulness of its operations in dependence upon business activity state in one branch. In addition, the size of premiums received is in part conditioned by the rules of obligatory insurance of the aviation risks established by the legislation of Ukraine. However, in 2006 the company has adopted new strategy of development providing for development of essentially new for Ukraine types of insurance connected with insurance of large risks. Adoption of new strategy and the first concrete steps of the company in the direction of non-aviation risks insurance markets for sure envisage the future improvement of diversification indicators by insurance types. Following the results of 2008, it is safe to say that the company had been successfully carrying out the development strategy and showed good financial indicators.
3. Expert Rating RA estimates as high the quality of assets of JSIC BUSIN: the company has no essential investments into shares or other non-liquid or hardly evaluatable instruments. 51% of company assets on the beginning of 2008 are identified as earning assets. The company practically has not suffered from the banking crisis in Ukraine.
4. Expert Rating RA estimates as high the quality of reinsurance cover. JSIC BUSIN has the largest in the history of the Ukrainian insurance market obligatory contract for reinsurance of aviation risks of aircraft operator liability to third parties and passengers (650m USD). Company obligations are underwritten by Berkshire Hathaway (USA), Hanover Re (Germany), Mitsui Sumitomo Insurance Company (Japan), Munich Re (Germany), Samsung Fire-Marine Insurance Co. (Korea), Tokyo Marine Nichido Fire Co. (Japan) etc. JSIC BUSIN cooperates with leading brokers listed on the New York Stock exchange and accountable to the US Commission on Securities and Exchanges of the USA.
5. JSIC BUSIN has no significant obligations and Expert Rating RA does not regard as possible or probable the risk of insolvency of the company. Company assets are covered by shareholders equity on 64 %; a high-quality reinsurance portfolio secures the risks accepted by the company. Now the company is exposed to risks of business activity reduction, which are rather connected with macroeconomic factors, not with the activity of the company.
6. JSIC BUSIN can expect in the future, for rating rise to the highest level of stability if the company will
settle the problem of branch diversification and along with that quality of assets and reinsurance cover will stay at level of the year 2008.

Details of the Press Release

Updated rating report of JSC IC BUSIN (engl.)

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