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AM Best Affirms Credit Ratings of Eurasia Insurance Company JSC
[August 04, 2022]

AM Best Affirms Credit Ratings of Eurasia Insurance Company JSC

AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of "bbb+" (Good) of Eurasia Insurance Company JSC (Eurasia) (Kazakhstan). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Eurasia's balance sheet strength, which AM Best assesses as strong, as well as the company's strong operating performance, neutral business profile and appropriate enterprise risk management.

Eurasia's balance sheet strength is underpinned by its risk-adjusted capitalisation, which is consistently maintained well above the minimum requirement for the strongest assessment, as measured by Best's Capital Adequacy Ratio (BCAR), and provides the company with sufficient capital buffers to absorb the impact of adverse fluctuations in its operating environment. Eurasia has a low dependence on reinsurance and employs a conservative reserving approach that has led to reserve redundancies in recent years. Whilst the company has taken steps to improve the quality of its investment portfolio, its asset base remains heavily exposed to the high financial system risk in Kazakhstan. In addition, Eurasia has potential exposure to catastrophe losses in Kazakhstan and internationally, which is an offsetting rating factor.

AM Best also notes the weaker credit profile of Eurasia's parent, Eurasian Financial Company JSC (EFC), primarily due to its ownership of JSC Eurasian Bank. In AM Best's opinion, Eurasia derives limited financial flexibility and liquidity from its parent. However, no rating drag has been applied to Eurasia's ratings from EFC, in view of regulatory restrictions in Kazakhstan that prohibit extraction of capital from a subsidiary to its detriment.

Eurasia's operating performance is assessed as strong, with the company reporting a five-year (2017-2021) weighted average combined ratio of 87.2% and return on equity of 22.4%. Whilst technical results have been subject to volatility, the company has reported positive operating earnings in each of the past 10 years,supported by solid investment returns. Underwriting results have been stable in recent years, and the company is taking actions to withstand the impact of current inflationary pressures and uncertain macroeconomic conditions by adjusting premiums and performing selective underwriting. AM Best expects Eurasia's operating performance over the underwriting cycle to remain in line with the strong assessment level.

Eurasia has a dominant role in the local (re)insurance market and benefits from geographic diversification through international inward reinsurance. It is the largest (re)insurance company in Kazakhstan, with a market share of approximately 20%, based on 2021 combined non-life and life market premiums (30% share of the non-life market). The company's international reinsurance portfolio provides diversification and accounts for approximately 45% of premiums written in 2021. This business primarily emanates from the United States, India and the United Kingdom, where the company maintains long-standing relationships with its cedants. However, Eurasia faces strong competition in international markets from companies with more established profiles.

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

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