A.M. Best Comments on Credit Ratings of Kommesk-Omir Insurance Company JSC Following Acquisition Agreement With Competitor

LONDON--(BUSINESS WIRE)-- A.M. Best has commented that the Credit Ratings (ratings) of Kommesk-Omir Insurance Company JSC (Kommesk-Omir) (Kazakhstan) remain unchanged following the company’s announcement on 15 January 2018 of its agreement with another non-life Kazakh insurer, JSC Salem Insurance Company, to acquire part of the latter’s underwriting portfolio. The business to be transferred mainly comprises compulsory motor third-party liability, which is Kommesk-Omir’s largest line of business, as measured by gross and net written premiums.

A.M. Best expects Kommesk-Omir’s rating fundamentals to remain unchanged by this transaction, which should be finalised in the first quarter of 2018. The company’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, is expected to remain at the strongest level over the medium term.

The impact of the transaction on the company’s underwriting risk and operating performance is likely to be limited, as Kommesk-Omir does not plan to renew the majority of the transferred policies. In addition, the potential mispricing risk associated with the underlying policies is partially mitigated by the nature of this business, as the National Bank of Kazakhstan sets rates and other policy terms for compulsory business. Based on the terms of the agreement and the loss experience of the acquired business in 2017, the transaction is expected to be profitable for Kommesk-Omir.

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.

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Source: A.M. Best