Fitch Rated AMANAT INSURANCE financial strength rating of B, Outlook Stable

/IRBIS, October 18, 2010/ - Fitch Ratings has assigned JSC Insurance Company "AMANAT INSURANCE" ("Amanat") financial strength rating on the international scale "B" and the financial strength rating on a national scale "BB (kaz)", stated in the published Today the message Fitch. The outlook - Stable. As stated, the ratings take into account the operational difficulties faced by Amanat because of forced restructuring, begun in 2009, as well as the unfavorable situation of Kazakhstan's insurance sector. On the other hand the ratings reflect the strong capitalization of the insurer, adjusted for risk, which is largely due to the sharp decline in net premiums collected in 2009 and is expected to be further supported by an infusion of capital in the fourth quarter of 2010. It is noted that out of the company's minority shareholder and a complete change management team in the first quarter of 2009 led to a decrease in the total volume of premiums collected from Amanat by 68% in 2009. The reason for this was a strong dependence of its customer base from the CEO, who was appointed by the company who came from a minority shareholder. The combined ratio significantly exceeded 100%, which was largely due to the coefficient of acquisition costs and deferred payment of reinsurance costs on the portfolio, which was signed in 2008. At the same time yield Amanat on adjusted shareholders' equity remained positive in 2009, supported by investment income. Majority shareholder, who has not previously received significant participation in the activities of the insurer, said its interest in the insurance business in 2009, appointed a new team and announced a substantial increase in capital, which should be completed in 2010 to help companies comply with new regulatory requirements capital. The portfolio began to recover in 2010, and the growth of total premiums collected amounted to 67% in 8 months. 2010. Fitch notes that the company is still exposed to the complexities associated with the operating environment in Kazakhstan's insurance sector. Main characteristics inherent in this sector - is the implementation of sales mainly through captive channels, and affiliation with the bank's leading insurers and industry groups. The insurance sectors of Kazakhstan have an adverse effect due to the weakening of prices during the global financial crisis, as well as insurance markets in many other countries. In Amanat no specific competitive advantages, which would help companies to reduce exposure to the complexities of the operating environment. The investment portfolio consists primarily of fixed income and with significant concentration in a number of industries. Investment portfolio credit quality is unequal, as about half of it falls on the instruments with an investment rating, and another - on low speculative-grade instruments. Partially mitigating factor in this regard is that all instruments are market. At the end of 2009, the total premiums of the company amounted to KZT2.8 billion, while total assets amounted to KZT3.6 billion. [2010-10-18]