AM Best Revises Outlooks to Positive for Halyk-Life, JSC
The revision of the outlooks to positive from stable reflects improvement in Halyk-Life’s operating performance in recent years, supported by economies of scale due to the merger in 2018 of sister insurer,
The Credit Ratings (ratings) reflect Halyk-Life’s balance sheet strength, which AM Best categorises as very strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management.
Halyk-Life’s balance sheet strength is underpinned by risk-adjusted capitalisation that is categorised as strongest, as measured by Best’s Capital Adequacy Ratio (BCAR), based on unaudited 2019 year-end regulatory returns. AM Best expects the company’s prospective BCAR to remain at the strongest level, helped by good operating results and a dividend policy that allows for a sufficient level of earnings retention to support the company’s growth plans. AM Best views positively enhancements to the company’s capital management framework, including the recent implementation of a risk-based capital concept to assess its capital adequacy. The company’s investment portfolio is relatively conservative, with fixed-income securities, cash and bank deposits accounting for over 90% of the company’s investments as at year-end 2019. However, Halyk-Life remains exposed to high financial system risk in
Halyk-Life is a leading insurer in Kazakhstan’s life insurance market, with an estimated market share of 39%, based on 2019 gross written premiums. The merger with Kazkommerts Life has strengthened its competitive position in segments such as pension annuities and savings products. However, Halyk-Life’s operations are limited to its domestic insurance market, which is small by international standards and remains subject to a high degree of regulatory risk. In addition, the company remains highly dependent on third-party distribution channels, especially for its credit life business.
This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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Source: AM Best
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