The rating action is based on Fitch’s current assessment of the impact of the coronavirus pandemic, including its economic impact, under a set of rating assumptions Fitch uses under the current global economic situation.
These assumptions were used by Fitch to develop pro-forma financial metrics for Allianz Russia that are compared with both rating guidelines defined in its criteria, and relative to previously established Rating Sensitivities for Allianz Russia.
The affirmation of the rating reflects Fitch’s view of Allianz Russia’s standalone credit profile (SCP) at ‘BBB-‘ and a two-notch uplift for the insurer’s ownership by Allianz SE (IFS AA/Stable), one of the world’s largest insurance groups. Fitch views Allianz Russia as strategically ‘Important’ to Allianz SE based on the agency’s methodology. This view is supported by a track record of parental support. The Russian subsidiary represents a small part of Allianz SE but has an important role in maintaining the Allianz group’s franchise in Russia.
Allianz Russia’s SCP continues to benefit from a ‘moderate’ business profile and good-quality, liquid investment portfolio, strong risk-adjusted capital position and resilient financial performance, Fitch said. Under the agency’s pro-forma analysis, financial ratios for investment risk and liquidity weakened only marginally compared with those based on 2019 regulatory reporting. The Prism Factor-Based Model (FBM) score remained ‘Extremely Strong’, unchanged from the actual end-2019 balance sheet.