FITCH Ratings assigned Kazakhstan-based Life Insurance Company STANDARD Life an Insurer Financial Strength (IFS) Rating of 'B' and a National IFS Rating of 'BBB-(kaz)'. The Outlooks are Stable.

"The ratings reflect STANDARD Life's weak business profile, exposure to long-term risks in the insurance portfolio, high investment risk and poor asset-liability matching. This is offset by the company's strong regulatory solvency position," FITCH said.

FITCH views Standard Life's regulatory capital position as strong for the rating.

STANDARD Life's new business mix has shifted since 2015 to pension annuities, deemphasizing life insurance. Pension annuities represented 73% of net written premiums (NWP) in 2017. However, FITCH notes, the company is exposed to significant longevity and interest rate risks in its annuity business, particularly in the context of limited investment opportunities in local capital markets.

FITCH believes the limited track record of operations and multiple changes in the management team also increase STANDARD Life's operational risk.

The ratings could be upgraded if STANDARD Life continues to be profitable or reduces investments risk or asset-liability mismatch, or improves the business diversification.

STANDARD Life was established in 2007. Dauren KOUMPEISOV, ex-CEO of Astana Bank, is the major shareholder owning 53.7% in it.