Russian SOGAZ insurer's A.M. Best ratings under review after the VTB purchase announcement

A.M. Best has placed under review with developing implications the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of "bbb" of INSURANCE COMPANY OF GAZ INDUSTRY SOGAZ (SOGAZ) (Russia), the agency announced.

These Credit Rating (rating) actions follow the company's announcement on 25 May 2018 that it has entered into an agreement with the VTB Group, a Russian financial services group, to acquire (LINK LOA http://xprimm.com/RUSSIA-the-local-market-will-have-a-new-biggest-player-after-the-merger-of-VTB-and-SOGAZ-articol-2,12,33-11298.htm) its insurance subsidiary, VTB Insurance Limited.

The transaction is expected to close in the third quarter of 2018, subject to required approvals. According to the two companies representatives this operation will allow the creation of the biggest insurer in the Russian history with maximal financial strength and balanced portfolio. The ratings will remain under review until the deal closes and A.M. Best completes its assessment of the impact of the acquisition on SOGAZ's rating fundamentals.

Based on 2017 results SOGAZ was the biggest local insurer with premiums of RUB 158 billion. VTB Insurance in 2017 took the fourth place with GWP in the amount of RUB 79.8 billion.

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