AM Best Affirms Credit Ratings of Life Insurance Company Kommesk-Omir JSC
31 Julio 2024 - 8:51AM
Business Wire
AM Best has affirmed the Financial Strength Rating of B-
(Fair) and the Long-Term Issuer Credit Rating of “bb-” (Fair) of
Life Insurance Company Kommesk-Omir JSC (Kommesk Life)
(Kazakhstan). The outlook of these Credit Ratings (ratings) is
stable.
The ratings reflect Kommesk Life’s balance sheet strength, which
AM Best assesses as strong, as well as its adequate operating
performance, very limited business profile and marginal enterprise
risk management.
Kommesk Life’s balance sheet strength is underpinned by its
risk-adjusted capitalisation, which is projected to remain at the
strongest level over its five-year business plan, as measured by
Best’s Capital Adequacy Ratio (BCAR). AM Best expects Kommesk
Life’s risk-adjusted capitalisation to be supported by positive
operating results in the medium term and full earnings retention as
the company executes its business plan. In addition, Kommesk Life’s
balance sheet strength assessment considers its limited reliance on
reinsurance. A partially offsetting rating factor is the relatively
low credit quality of Kommesk Life’s investment portfolio,
reflecting its concentration in its domestic market, which exposes
the company to high levels of economic, political and financial
system risks associated with Kazakhstan.
The adequate operating performance assessment considers Kommesk
Life’s business plan to develop its profile as a specialised life
insurer. AM Best expects Kommesk Life to grow its earnings and
maintain positive technical return metrics over the underwriting
cycle, notwithstanding the execution risk associated with its
planned scale up. In 2023, under IFRS 17, Kommesk Life reported
profit before tax of KZT 361 million.
Kommesk Life restructured its operations in recent years, in
line with its decision to operate as a specialist life insurer. The
company transferred out its non-life insurance portfolio to an
affiliate in 2022, and merged with its former life insurance
subsidiary, Life Insurance Company Centras Kommesk Life JSC, in
2023. Kommesk Life operates solely in the competitive Kazakh
market, underwriting traditional life products, pension annuities
and workers’ compensation insurance. The very limited assessment of
the business profile reflects Kommesk Life’s portfolio, which,
albeit projected to grow, has a small size by domestic and
international standards. The execution and market acceptance risks
associated with Kommesk Life’s plan to materially scale up its
current operations in the life segment are partially mitigated by
the presence of an experienced and stable management team. In line
with its plan, the company reported total premium of approximately
KZT 8.7 billion (USD: 19.0 million) in 2023.
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 use of Best’s Credit Ratings, Best’s Performance
Assessments, Best’s Preliminary Credit Assessments and AM Best
press releases, please view Guide to Proper Use of Best’s
Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and
data analytics provider specialising in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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Todor Kitin, ACA Senior Financial Analyst +44
20 7397 0335 todor.kitin@ambest.com
Ghislain Le Cam, CFA, FRM Senior Director,
Analytics +44 20 7397 0268 ghislain.lecam@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com