Baku, Azerbaijan, Dec. 29
By Ali Mustafayev – Trend:
S&P Global Ratings revised its outlook on Kazakh Grain Insurance Co. JSC to stable from developing. At the same time, S&P affirmed 'B' long-term issuer credit and insurer financial strength ratings, as well as 'kzBB+' national scale rating on the company.
The outlook revision stems from the opinion that the potential for both upside and downside dynamics of the ratings on the company is limited over the next year.
“Risks that we were concerned about in March 2017, when we assigned Grain Insurance a developing outlook, did not materialize. Grain insurance maintained its capital base”, S&P said in a message.
The rating agency doesn’t see any negative spillover effects from other businesses of Grain Insurance's controlling shareholder, Nurlan Tleubaev, on Grain Insurance. Grain Insurance's deposit in ailing JSC Delta Bank was fully repaid.
“We expect volumes of agricultural insurance coming from related companies to be maintained. Reduction of the company's gross premium written (GPW) by about 45 percent in 2017 resulted from discontinuance of credit insurance that it wrote previously in cooperation with the affiliated Delta Bank.
S&P sees no further reduction of Grain Insurance's business size, given its importance for the development of the agricultural sector, which the government has stated as one of its main priorities for the next decade.
Grain Insurance has a dominant position in crop insurance in Kazakhstan, covering around 81 percent of the market by GPW (Gross Product Worth) in the first 10 months of 2017, with the second-largest player, Kazakhinstrakh, covering 18 percent.