AM Best Affirms Credit Ratings of Victoria Insurance Company JSC

AM Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of Victoria Insurance Company JSC (Victoria) (Kazakhstan). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Victoria’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and weak enterprise risk management.

Victoria’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and its relatively conservative investment portfolio by asset class, providing the company with good levels of liquidity. A track record of solid internal capital generation has resulted in the accumulation of a large shareholders’ equity base, available to absorb potential volatility associated with Victoria’s underwriting exposures and challenging operating environment. An offsetting factor to the balance sheet strength assessment is Victoria’s limited protection against potential natural catastrophe losses in Kazakhstan.

Victoria has a track record of strong operating performance supported by solid underwriting profitability, as demonstrated by a five-year (2019-2023) weighted average combined ratio of 77.8% (as calculated by AM Best based on IFRS 4 results). However, technical results have been volatile due to low frequency, high severity claims in its property and liability books of business. In 2024, Victoria reported overall unaudited pre-tax earnings of KZT 14.3 billion (approximately USD 27.8 million), compared with KZT 7.5 billion (approximately USD 14.5 million) in the previous year, underpinned by a good technical result of KZT 2.0 billion (approximately USD 3.8 million) and solid investment returns, reflecting the high-interest rate environment in Kazakhstan and globally. AM Best expects Victoria’s operating performance to remain strong, albeit volatile due to changes in the value of fixed-income investments, as a result of interest rates and foreign currency exchange fluctuations.

Victoria has a limited business profile as a small, non-life insurer operating solely in Kazakhstan’s fragmented and competitive insurance market. The company is ranked 11^th among the country’s 15 non-life insurers, based on 2024 gross written premium (GWP), with a market share of 1.9%. Victoria’s GWP substantially decreased in 2024, to KZT 13.3 billion (approximately USD 25.9 million). The decline was driven by a termination of a material motor and property co-insurance arrangement that has been in place in 2023 and until May 2024. The termination of this agreement had a comparatively smaller impact on the net basis, with Victoria’s net written premiums (NWP) declining to KZT 12.5 billion in 2024 from KZT 18.1 billion as this contract was largely reinsured.

AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.

This press release relates to Credit Ratings that have been published on AM 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 AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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