A.M. Best Withdraws Credit Ratings of Standard Insurance Company JSC
Concurrently,
The ratings reflect Standard’s balance sheet strength, which
Standard’s balance sheet strength is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, being at the strongest level. The company’s risk-adjusted capitalisation improved in 2017, due to a reduction in underwriting risk following the non-renewal of a significant part of the insurance portfolio of Alliance Policy Insurance Company JSC, which was absorbed by the company in the previous year. Factors that negatively affect the balance sheet strength assessment are the company’s weak financial flexibility, questions over its ability to manage its catastrophe exposure, as well as its elevated investment risk profile, due to the high financial system risk in
Standard’s performance has been volatile, with its return on equity ranging between -3.1% and 20.4% over the 2013-2017 period. Technical performance is weak, with losses reported in each of the past six years, apart from 2016. The company has a five-year weighted average combined ratio of 106.9% (2013–2017). In 2017, the company reported a combined ratio of 107.9% (2016: 94.3%), with performance impacted by the reduction in premium income and a high level of expenses.
Standard ranked as the 11th largest among Kazakhstan’s 25 non-life insurers in 2017 with a 3% market share. The company’s top line has fluctuated in recent years, as a 93.8% increase in gross written premium for 2016 was followed by a decline of approximately 23% in 2017, due to the non-renewal of a material part of the recently absorbed business and a number of large fronted contracts.
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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Laura Balkarova, +44 20 7626 6264
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