A.M. Best Affirms Ratings of Nomad Insurance Company JSC

LONDON--(BUSINESS WIRE)-- A.M. Best has affirmed the financial strength rating of B- (Fair) and the issuer credit rating of “bb-” of Nomad Insurance Company JSC (Nomad), the wholly-owned subsidiary of Nomad Insurance Group Limited, a private non-operating company (both entities are domiciled in Kazakhstan). The outlook on the ratings is stable.

The ratings of Nomad reflect its strong risk-adjusted capitalisation and established business profile in the local market. Offsetting these factors are Nomad’s negative technical performance and the company’s exposure to the high country risk of Kazakhstan.

Nomad’s risk-adjusted capitalisation strengthened in 2014, with a further improvement anticipated for 2015, due to a rise in its surplus base driven by a capital injection and the retention of earnings. Additionally, the company’s risk-adjusted capitalisation is supported by the excellent credit quality of its reinsurance panel and its relatively low net underwriting leverage, as per the company’s net premium retention ratio of approximately 40%.

Nomad’s positive operating performance benefits from the strong investment yields derived from its portfolio of cash, deposits and fixed-income securities, including those denominated in foreign currency. However, in A.M. Best’s opinion, this position is subject to change due to the low credit quality of the company’s invested assets and volatility associated with the high financial system risk in Kazakhstan. Although A.M. Best expects Nomad’s overall performance to be supported by significant foreign exchange gains in 2015, its underwriting result is likely to be negative due to the impact of its high expense base relative to net written premiums. In October 2015, Nomad’s combined ratio deteriorated to 112% compared to 102% for the same period in the previous year.

Nomad maintains an established business profile, ranking as the fourth largest insurer in the domestic non-life market. Nonetheless, A.M. Best believes that the high levels of competition from a large number of insurers operating in the relatively small insurance market, coupled with the impact of fluctuating regulatory environment in Kazakhstan, reduce Nomad’s ability to defend its competitive position, owing to its limited scale and diversification.

In accordance with Regulation (EC) No. 1060/2009, the following is a link to required disclosures: A.M. Best Europe - Rating Services Limited Supplementary Disclosure.

This press release relates to rating(s) that have been published on A.M. Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please visit A.M. Best’s Ratings & Criteria Center.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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A.M. Best Company

Valeria Ermakova, +(44) 20 7397 0269

Financial Analyst

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Deniese Imoukhuede, +(44) 20 7397 0277

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Christopher Sharkey, +(1) 908 439 2200, ext. 5159

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Jim Peavy, +(1) 908 439 2200, ext. 5644

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Source: A.M. Best Company