A.M. Best Comments on Credit Ratings of JSC IC Kazkommerts-Policy Following Announcement on Merger with a Sister Company

LONDON--(BUSINESS WIRE)-- A.M. Best has commented that the Financial Strength Rating of C++ (Marginal) and the Long-Term Issuer Credit Rating of “b+” of JSC IC Kazkommerts-Policy (Kazkommerts-Policy) (Kazakhstan) remain unchanged following an announcement on 25 January 2018 by its sister company, Halyk-Kazakhinstrakh, Insurance Subsidiary Company of Halyk Bank of Kazakhstan, JSC (Kazakhinstrakh), of the latter’s shareholder agreement to merge Kazkommerts-Policy into Kazakhinstrakh. The merger decision follows the 2017 acquisition of JSC Kazkommertsbank, Kazkommerts-Policy’s parent, by JSC Halyk Bank (Halyk Bank), Kazakhinstrakh’s parent.

In anticipation of the merger, Kazkommerts-Policy paid a large one-time dividend of KZT 4 billion (approximately USD 12 million) in December 2017, which resulted in deterioration of the company’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio. In spite of this, the company’s rating fundamentals, including balance sheet strength, remain supportive of its ratings.

The merger is subject to regulatory approvals and is expected to complete during 2018. A.M. Best will continue to monitor closely Kazkommerts-Policy’s rating fundamentals ahead of the planned merger. Further deterioration of risk-adjusted capitalisation, for example due to the additional extraction of capital, could place negative pressure on the company’s ratings.

This press release relates to Credit Ratings 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 see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20180206005796/en/

A.M. Best

Yevgine Asatryan, +44-20-7397-0316

Financial Analyst

[email protected]

or

Catherine Thomas, +44-20-7397-0281

Senior Director, Analytics

[email protected]

or

Christopher Sharkey, +1-908-439-2200, ext. 5159

Manager, Public Relations

[email protected]

or

Jim Peavy, +1-908-439-2200, ext. 5644

Director, Public Relations

[email protected]

Source: A.M. Best