A.M. Best Revises Outlooks to Stable for Halyk-Kazakhinstrakh, Insurance Subsidiary Company of Halyk Bank of Kazakhstan, JSC
The Credit Ratings (ratings) reflect Kazakhinstrakh’s balance sheet strength, which
The revision of the outlooks to stable reflects Kazakhinstrakh’s strong results in 2016 and the first eleven months of 2017, which demonstrate its resilience to difficult market conditions. Although underwriting performance has weakened in recent years, the company has produced a consistently good return on capital, retained its leading market position and continued to steadily implement its retail expansion strategy.
Kazakhinstrakh is one of the established leaders in the Kazakh non-life market, ranking third and second as measured by gross and net written premiums respectively in the first nine months of 2017. Historically, the company predominantly focused on corporate insurance but has expanded into the retail sector in recent years in response to deteriorating profit margins. In particular, it has increased its presence in the motor market and sought to actively leverage Halyk Bank’s wide network of offices to support further expansion.
Operating performance has been consistently strong, driven by good underwriting performance and positive investment returns. In spite of a deterioration compared with pre-2015 levels, technical results have remained robust, with a combined ratio in the mid-90s expected for 2017 (2016: 91%). Prospective underwriting performance is expected to be in line with recent results. Kazakhinstrakh continues to produce a strong level of overall earnings, reflected in an expected return on capital of 15% for 2017, which is in line with historical performance.
Kazakhinstrakh’s very strong balance sheet strength is underpinned by risk-adjusted capitalisation, assessed as strongest by
Kazakhinstrakh’s financial strength is not considered to be currently affected by the weaker credit profile of its parent,
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
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