KOMMESK-OMIR stopped cooperation with Moody's Investors Service

9 May 2015 — Olesea ADONEV
According to Kazakh insurer KOMMESK-OMIR's press release, "the insurer has decided to withdraw its financial rating which is assigned by the Moody's Investors Service".

In June 2014, Moody's Investors Service has affirmed the B3 global insurance financial strength rating (IFSR) and B3.kz national scale rating for KOMMESK-OMIR. The rating outlook appeared to be stable. The affirmation of KOMMESK-OMIR's ratings reflects its resilient profitability and its adequate solvency position in the context of a significant number of regulatory changes in the Kazakh market.

At the beginning of the current year, KOMMESK-OMIR has a financial strength rating of C++ (Marginal) and an issuer credit rating of "b+" from the international rating agency AM Best Company. The outlook for both ratings is stable as well.

"Comparing the rating scales of the different rating agencies should be noted that the credit rating of "b+" by AM Best had the similar level with the rating offered by the agency Standard & Poor's and Fitch "B +"and corresponded to "B1" rating from Moody's Investors Service", according to the company's press release.

According to AM BEST's report, "the ratings reflect KOMMESK's marginal business profile in the Kazakh insurance market, volatile operating performance and adequate risk-adjusted capitalization. KOMMESK maintains a marginal business profile as the 23rd insurer in Kazakhstan (ranked on gross written premium) with a 1.5% market share at year-end 2014. The company's underwriting portfolio is heavily weighted toward compulsory motor third-party liability and health business, which combined account for more than 50% of its premium volume. However, due to the intense competitive conditions and reduced profitability of its core lines of business, KOMMESK is expected to further penetrate the voluntary third-party liability and motor hull lines of business to support its growth. Although the company's well-established direct distribution network is likely to support its expansion, for example, through prospects arising from cross-selling opportunities, A.M. Best believes that KOMMESK's marginal business profile makes its earnings potentially susceptible to sudden and unexpected changes in the operating environment, typical within the Kazakh insurance market".

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