Fitch Confirmed Limited Impact of the Case with Euroins Romania over the EIG and its Other Subsidiaries
29.03.2023
Fitch Confirmed Limited Impact of the Case with Euroins Romania over the EIG and its Other Subsidiaries
Sofia, 29 March 2022
Fitch Ratings, one of the leading rating agencies worldwide, has downgraded the rating of Euroins Romania from "B+" to "CC". At the same time Fitch Ratings has left unchanged the ratings of the other Euroins Insurance Group’s subsidiaries, assessed by the agency - ZD Euroins and reinsurance company EIG Re, as well as the group itself. The agency only placed them on Rating Watch Negative (RWN). “We expect the overall impact on EIG's credit profile to be limited”, says Fitch Ratings, noting that heightened reputational risk can further weaken this profile. Fitch has underlined that “the reinsurance contract between the two subsidiaries of Euroins” (that of Euroins Romania with EIG Re), which had been unrecognized by the Romanian regulator, has not been compromised, because that decision of the Romanian supervisory authority has been contested by the insurance group. In this regard, it has also been recalled that independent actuarial checks have been ongoing for the validity of this contract by EIOPA and EBRD, which is a minority shareholder in EIG. As already mentioned, Eurohold Bulgaria AD, the majority owner of EIG, took all necessary measures to ensure stable and normal activity of all other companies of the group, outside of Euroins Romania. All other subsidiaries and businesses of the holding in all the remaining 11 markets in which they operate, including insurance and energy ones, continue to act as usual without any problems, serving their customers and obligations and fulfilling their business plans for the year. With reference to the decision of the Romanian financial regulator, taken on 17 March, to revoke the license of Euroins Romania, the management of Eurohold and Euroins Insurance Group have already announced that they would appeal it in the law court and applied for a reversal of this decision.
