LONDON–(BUSINESS WIRE)–AM Best has confirmed the Financial Strength Test of B++ (Good) and the Long-Term Credit Rating of “bbb+” (Good) for Eurasia Insurance Company JSC (Eurasia) (Kazakhstan). The loan format (parts) is fixed.
The ratings reflect the strength of Eurasia’s paper, which AM Best considers strong, as well as the company’s strong performance, neutral business history and sound business management.
The strength of Eurasia’s paper is supported by the management of risk-adjusted capital, which is always kept above the requirements of the capital adequacy analysis, as measured by Best’s Capital Adequacy Ratio (BCAR), and provides the company with sufficient buffers to adapt to the current situation. about the negative dynamics in his workplace. Eurasia relies less on reinsurance and uses a savings strategy that has led to savings in recent years. Although the company has taken steps to improve its financial performance, its financial position remains highly vulnerable to the financial crisis in Kazakhstan. In addition, Eurasia has access to risks in Kazakhstan and around the world, which is a limitation.
AM Best also points to the weak credit history of Eurasia’s parent, Eurasian Financial Company JSC (EFC), largely due to its ownership of JSC Eurasian Bank. In AM Best’s opinion, Eurasia gets less flexibility in terms of financial and financial stability from its parent. However, no vote pull has been used in Eurasia from the EFC, due to restrictions in Kazakhstan that prevent the withdrawal of funds from another sector to destroy it.
Eurasia performance is considered strong, and the company reports a five-year (2017-2021) weighted average of 87.2% and a return of 22.4%. While technical results have been mixed, the company has reported positive earnings over the past 10 years, supported by strong returns. Underwriting results have been stable in recent years, and the company is taking steps to combat inflationary pressures and economic uncertainty by adjusting premiums and selective underwriting. AM Best expects Eurasia’s performance at the time of writing to be in line with the firm’s assessment.
Eurasia has a large share of the local (re)insurance market and benefits from geographic diversification through international reinsurance. It is the largest (re)insurance company in Kazakhstan, with a market share of about 20%, based on 2021 combined non-life and life market premiums (30% share of the non-life market). The international reinsurance company offers a variety of products and accounts for approximately 45% of written premiums in 2021. This business is based in the United States, India and the United Kingdom, where the company maintains long-term relationships with its centants. However, Eurasia is facing strong competition in international markets from companies with established reputations.
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