|By Carole Lovell|
|A.M. Best Company, Inc.|
The rating upgrades for Kazakhinstrakh reflect its strong underwriting results and good competitive position in the
Kazakhinstrakh continues to enjoy a leading position as an insurer in
The company has opened a number of new branches by leveraging on its relationship with its owner,
Kazakhinstrakh’s financial performance remains strong, as demonstrated by a five-year average return on capital and surplus of 20%. Earnings are consistently supported by excellent technical results (on an International Financial Reporting Standard basis), with a combined ratio not higher than 85% since 2006. In 2011, the company is expected to report a pre-tax profit of approximately
Kazakhinstrakh maintains strong risk-adjusted capitalisation, supported by higher retained earnings and a rise in capital, following an injection from its parent in 2008 and 2009. The company is exposed to some reinsurers with vulnerable or no ratings, as well as to sub-investment grade debt securities issued in the local Kazakh market, exposing Kazakhinstrakh to the high political and financial system risk of the country.
A negative rating factor relates to the company’s catastrophe exposure modelling capabilities, which
Upward rating actions could occur if Kazakhinstrakh reduced its exposure to poorly rated reinsurers and sub-investment grade securities. Improvement in the company’s loss modelling and enterprise risk management may also put upward pressure on the ratings.
Negative rating actions could occur if the company experienced a large technical loss or a deterioration in the performance of the company’s bond portfolio. A decline in country risk fundamentals could also have a negative impact on Kazakhinstrakh’s ratings.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilised include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding Universal BCAR”; “Assessing Country Risk”; “Rating Members of Insurance Groups”; and “Understanding BCAR for Property/Casualty Insurers”. Best’s Credit Rating Methodology can be found at http://www.ambest.com/ratings/methodology.
In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures:http://www3.ambest.com/emea/ambersdisclosure.pdf.