Market Overview

A.M. Best Affirms Credit Ratings of Eurasia Insurance Company JSC


A.M. Best has affirmed the Financial Strength Rating (FSR) of B++
(Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of "bbb+"
of Eurasia Insurance Company JSC (Eurasia) (Kazakhstan). The
outlook of the Long-Term ICR remains negative, whilst the outlook of the
FSR remains stable.

The Credit Rating (rating) affirmations reflect Eurasia's good albeit
volatile technical performance, excellent risk-adjusted capitalisation
and solid business profile in Kazakhstan. Offsetting rating factors are
the company's exposure to difficult operating conditions in its core
markets and the elevated risk profile of its parent, the Eurasian
Financial Company JSC
(Eurasian Financial).

The negative outlook on the company's Long-Term ICR reflects A.M. Best's
view that the level of financial flexibility Eurasia derives from
Eurasian Financial continues to be pressured due to the weak credit
profile of the group's largest subsidiary, Eurasian Bank JSC. The bank
maintains low regulatory capital adequacy and has a material asset risk
exposure. Additionally, A.M. Best believes that Eurasia's prospective
underwriting results will likely be affected by the elevated level of
economic risk in Kazakhstan, as well as soft pricing and significant
competitive pressures in the global reinsurance market in which it
currently maintains a limited business profile.

In 2016, Eurasia reported a good combined ratio of 64.3% (2015: 139.0%),
underpinned by relatively benign claims experience, reserve releases on
its property and workers' compensation portfolios and strong premium
growth. Additionally, the stabilisation of the Tenge / U.S. dollar
exchange rate supported the performance of Eurasia's international
portfolio. In contrast, in 2015, a significant devaluation of the local
currency led to material reserve strengthening.

Eurasia's risk-adjusted capitalisation declined in 2016 due to an
increase in its underwriting risk, but remained at an excellent level.
The company's balance sheet is supported by a high level of earnings
retention and its shareholders' strategy of reinvesting a large
proportion of dividends into the insurer's paid-up capital. Eurasia's
substantial capital buffers, strong shareholder commitment and
regulatory safeguards on the extraction of capital from an insurance
company are factors that partially alleviate A.M. Best's concerns
regarding the potential for a sudden decline in Eurasia's risk-adjusted

This press release relates to Credit Ratings that have been published
on A.M. 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 A.M. Best's
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best's Credit Ratings

A.M. Best is the world's oldest and most authoritative insurance
rating and information source. For more information, visit

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