Новости

24фев2016

A.M. Best Affirms Ratings of Kommesk-Omir Insurance Company JSC

 
A.M. Best has affirmed the issuer credit rating of "b+” of Kommesk-Omir Insurance Company JSC (Kommesk) (Kazakhstan). The outlook for both ratings is stable.
 
The ratings reflect Kommesk’s adequate risk-adjusted capitalisation, volatile operating performance and marginal business profile.
 
Kommesk’s level of risk-adjusted capitalisation continues to reflect its strategy of maintaining a significant capital buffer above minimum regulatory requirements, and is supported by retained earnings and equalisation reserves. Additionally, balance sheet strength benefits from a high quality reinsurance panel and an investment portfolio that is heavily skewed toward bonds and cash. In 2016, A.M. Best expects Kommesk’s risk-adjusted capitalisation to remain at an adequate level, supported by the substantial foreign exchange gains reported in the previous year. These gains arose from the company’s significant holdings of U.S. dollar-denominated investments, which benefited from the devaluation of the tenge in August 2015. However, material downside risk remains, as Kommesk’s balance sheet is exposed to intense competitive conditions in its domestic market and increasing asset risk due to Kazakhstan’s economic difficulties.
 
Kommesk’s operating performance remains volatile, as demonstrated by a profit after tax of KZT 3.37 billion in 2015 compared with KZT 312 million in the previous year. Earnings in 2015 were boosted by investment earnings of KZT 4.26 billion, which included significant foreign exchange rate gains. Given the ongoing intense competitive conditions of the domestic insurance market, coupled with economic challenges, the company is likely to find it difficult to produce stable and profitable earnings growth.
 
The company’s underwriting portfolio is heavily weighted toward compulsory motor third-party liability and health business, which are lines of business characterised by declining profitability. Kommesk therefore intends to further develop its voluntary third-party liability and motor hull segments, aided by its diversified distribution channels. A.M. Best believes that the company’s lack of diversification and small size limit Kommesk’s ability to defend its market position in an increasingly challenging operating environment.

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