S&P considers that the company's business model will undergo material changes following the expected ownership transfer in 2021. And according to the agency, "the company's absolute capital remains small in an international context".
The stable outlook reflects S&P's expectation that Basel Insurance "will build up its competitive standing in Kazakhstan's insurance market due to its local knowledge, while maintaining sufficient capital and sound underwriting performance". The ratings reflect "its solid capital adequacy, although on a small capital base; more cautious investment strategy than that of peers; and sound liquidity cushion".
The insurer was established back in 1994 as Kaspi Insurance and was rebranded in May 2020. Previously the company serviced clients of Kaspi Bank with bancassurance products. In December 2020 it was announced that Kaspi Bank would transfer its 100% stake in Basel Insurance to a private individual Daniyar ZHANBEKOV. In the first 11 months of 2020 GWP of Basel Insurance declined, but its operating results remained solid, both on the underwriting and investment side.
As Basel Insurance is not a well-known brand in Kazakhstan's insurance market compared with peers, the agency expects "that the company's expense ratio will materially increase next year close to the market average of 50%-55%, but the net combined ratio (loss and expense) will remain at least below 90% in 2021-2022". S&P assesses Basel Insurance's capital adequacy as sufficient to support its current and projected business volumes, which are expected to be maintained in the next 12-24 months.
According to the market results for 9 months of 2020, Basel took the 21st place in terms of GWP in the overall ranking of insurance companies in Kazakhstan.