S&P Assigned 'B+' long-term ratings and 'kzBBB+' Kazakhstan national scale rating to Kazakhstan-based insurer Eurasia Insurance Co.; The outlook is stable

/Standard & Poor's, Moscow, June 06, 08/ - Standard & Poor's Ratings Services said today that it assigned its 'B+' long-term counterparty credit and insurer financial strength ratings and its 'kzBBB+' Kazakhstan national scale rating to Kazakhstan-based insurer Eurasia Insurance Co. The outlook is stable. "The ratings reflect the significant economic and industry risks that can affect insurers and other financial institutions in the domestic Kazakh market," said Standard & Poor's credit analyst Victor Nikolskiy. "The high credit risk exposure to the currently troubled local banking sector, unproven adequacy of reserving and the lesser concern that Eurasia's financial flexibility and shareholder support have yet to be tested in adversity are also rating constraints." These factors are mitigated by the company's good, sustainable, and leading position in Kazakhstan's--and, increasingly, the region's--insurance and reinsurance markets; good operating performance, evinced by the earnings of recent years. The company also implicitly benefits from the extensive business connections of its ultimate shareholder group (comprising wealthy and influential Kazakh businessmen) who have declared their long-term support for Eurasia and given some substance to this by forgoing an annual dividend in recent years. We expect that Eurasia will maintain its position as the leading Kazakh commercial insurer, with a good operating performance, adequate capitalization, an increasingly diversified business geographic spread, and an investment portfolio with no increase in Eurasia's already high exposure to Kazakhstan's troubled banking sector. "The outlook on Eurasia's ratings could be revised to positive or the ratings could even be raised if the insurer maintains operating performance at a good and sustainable level, and if the quality of investments improves," said Mr. Nikolskiy. The outlook could be revised to negative due to significant deterioration in asset quality or in operating performance, or if the currently high economic and industry risks become even more acute in the Republic of Kazakhstan (foreign currency BBB-/Negative/A-3, local currency BBB/Negative/A-3, Kazakhstan national scale 'kzAAA'). For detailed information please contact to: Victor Nikolskiy, Moscow (7) 495-783-40-10 Victor_Nikolskiy@standardandpoors.com David Anthony, London, 44 (207) 176-70-10; david_anthony@standardandpoors.com [2008-06-09]