Fitch Revises Kazakhmys Insurance's Outlook to «Positive», affirms IFS at «BB-»
11 May 2022: Fitch Ratings has revised the Outlooks on JSC Kazakhmys Insurance Company's (Kazakhmys Ins) Insurer Financial Strength (IFS)Rating and National IFS Rating to Positive from Stable and affirmed the IFS Rating at «BB-» and National IFS Rating at «BBB+(kaz)».
The revision of the Outlook to Positive reflects higher volumes of profi table business retained by Kazakhmys Ins and Fitch's expectations that the company will maintain risk retention at least at the current levels.
The ratings continue to reflect Kazakhmys Ins's «favourable» business profile, adequate capital position and profitability, but are constrained by high, albeit reducing, dependence on outwards reinsurance.
In 2021, Kazakhmys Ins reported KZT4.4 billion net income and 31% return on equity, compared with KZT2.7 billion and 21% the previous year. The increase in net profit was supported by a very strong underwriting result due to a higher volume of net earned premiums. Kazakhmys Ins's portfolio has had strong underwriting results with an average loss ratio of 2% on gross basis (before reinsurance) in 2017-2021.
Fitch views Kazakhmys Ins's investment strategy as fairly prudent given the available choice of domestic investment instruments. The insurer does not have any meaningful equity holdings and maintains good average credit quality of bonds and bank instruments.
