AM Greatest has affirmed the Monetary Power Ranking of B- (Truthful) and the Lengthy-Time period Issuer Credit score Ranking of “bb-” of Kommesk-Omir Insurance coverage Firm JSC (Kommesk) (Kazakhstan). The outlook of those Credit score Scores (scores) stays steady.
The scores mirror Kommesk’s steadiness sheet power, which AM Greatest categorises as robust, in addition to its marginal working efficiency, very restricted enterprise profile and marginal enterprise danger administration.
Kommesk’s steadiness sheet power is underpinned by its risk-adjusted capitalisation on the strongest stage, as measured by the Greatest’s Capital Adequacy Ratio (BCAR). AM Greatest expects risk-adjusted capitalisation to stay on the strongest stage over the medium time period, albeit with a smaller buffer, as the corporate organically grows its underwriting portfolio. As well as, Kommesk’s steadiness sheet power is supported by a complete reinsurance programme, backed by a panel of reinsurers of sound monetary power. Offsetting ranking elements are the comparatively low credit score high quality of the corporate’s funding portfolio and its publicity to excessive monetary system danger in Kazakhstan.
Kommesk is a small non-life insurer working solely within the aggressive home market. In 2018, gross written premium (GWP) elevated by 38%, primarily pushed by motor third-party legal responsibility (MTPL) enterprise as Kommesk benefited from market consolidation. Regardless of this, the corporate’s share in Kazakhstan’s non-life market stays small, at 3%, primarily based on 2019 GWP. Kommesk’s underwriting portfolio is concentrated, with two-thirds of its internet written premiums sourced from obligatory MTPL enterprise. On the finish of 2019, Kommesk established a brand new life subsidiary, Centras Kommesk Life JSC. AM Greatest expects the brand new firm to underwrite native employees’ compensation enterprise, in addition to pension annuity and life insurance coverage enterprise. This has a possible to enhance Kommesk’s portfolio diversification sooner or later.
Kommesk generated a five-year weighted common return on fairness of 15.5% over the interval 2015-2019, primarily supported by funding returns. Underwriting efficiency has been marginal, mirrored in a five-year weighted common mixed ratio of 110%, owing to excessive acquisition prices and the influence of inadequate scale on the corporate’s expense ratio. In 2019, Kommesk’s technical outcome deteriorated, as its loss ratio elevated by 13 share factors, resulting from reserve strengthening from a big single declare and a rise in paid attritional losses. Over the medium time period, AM Greatest expects working efficiency to stay marginal, with income depending on funding returns.
This press launch pertains to Credit score Scores which were revealed on AM Greatest’s web site. For all ranking info referring to the discharge and pertinent disclosures, together with particulars of the workplace answerable for issuing every of the person scores referenced on this launch, please see AM Greatest’s Current Ranking Exercise internet web page. For added info concerning the use and limitations of Credit score Ranking opinions, please view Information to Greatest’s Credit score Scores. For info on the correct media use of Greatest’s Credit score Scores and AM Greatest press releases, please view Information for Media – Correct Use of Greatest’s Credit score Scores and AM Greatest Ranking Motion Press Releases.
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