Baku, Azerbaijan, September 24
By Nargiz Sadikhova - Trend:
Rating agency S&P Global Ratings affirmed its 'B' long-term insurer financial strength and issuer credit ratings on Kazakhstan-based Grain Insurance Company JSC, the outlook is stable, on September 24, Trend reports with reference to the agency’s report.
“At the same time, we affirmed our 'kzBBB-' national scale rating on the company,” the report said.
According to the report, the stable outlook reflects expectation that the company can restore its crop insurance premium volumes over the next 12 months, allowing it to maintain sound profitability and capitalization.
“We affirmed the ratings because we think that Grain Insurance will continue playing an important role in Kazakhstan's crop insurance market, despite ongoing changes to the obligatory crop insurance product regulation," the agency noted.
As stated in the report, under the new regulation, insurance prices will likely increase materially but so will claim payments.
“In addition, insurance procedures will become more digitalized, including online sales and the use of satellite imaging in the claim settlement process. The state is expected to continue subsidizing half of the insurance premiums, with insurance remaining mandatory for farmers that request state support for investment projects and field works,” the report said.
"As a result, we expect crop insurance will become more attractive for insurers and clients, which may lead to intensifying competition. We expect, however, that Grain Insurance can retain its premium volume, since it has significant expertise in this market, unlike other local insurers,” said the agency.
Furthermore, Grain Insurance's investment portfolio comprises speculative-grade deposits at local banks with average credit quality in the 'BB' category. The agency sees the company’s liquidity as exceptional.
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