Getting access to east European financial martkets is not an easy task, I hope that FFH culture will eventually prevail, but knowing it from my personal experience it may take some time.
Jack W.
TEXT-S&P: Polskie Towarzystwo Reasekuracji outlk neg
11:35am ET (Reuters)
(The following statement was released by the rating agency)
Oct 2 - Standard & Poor's Ratings Services said today that it had revised its outlook on Polish Reinsurer Polskie Towarzystwo Reasekuracji S.A. (Polish Re) to negative from stable and affirmed the 'BBB' local currency long-term counterparty credit and insurer financial strength ratings.
"The outlook revision reflects our view that Polish Re may fail to achieve sustainable underwriting profit in the medium term, given its current marginal competitive position," said Standard & Poor's credit analyst Victor Nikolskiy.
The ratings on Polish Re reflect the continuing financial and operation support Polish Re receives from its new parent Fairfax Financial Holdings Ltd. (Fairfax; BBB-/Stable/--), adequate capitalization levels underpinned by a recent capital increase, and the good liquidity of the investment portfolio covering technical reserves.
These positive factors are offset by Polish Re's only marginal competitive position, with very high concentrations on top cedants, and an increased investment risk profile with high exposure to equity risks.
The negative outlook reflects our view that Polish Re may fail to achieve sustainable underwriting profit in the medium term.
"We will lower the ratings if the company fails to achieve underwriting profits," said Mr. Nikolskiy.
Moreover, any material negative development in shareholder support, capitalization, investment portfolio quality, competitive position, operating performance, or negative rating actions on the parent could lead to negative rating actions.
If the company demonstrates an ability to grow profitably, however, the outlook could be revised to stable. RELATED RESEARCH Group Methodology, April 22, 2009 Interactive Ratings Methodology, April 22, 2009