S&P lowers Eurasia Insurance view to stable

S&P said it revised the outlook on Eurasia Insurance Co. to stable from positive.

The agency also said it affirmed the BB+ long-term counterparty credit and financial strength ratings on the insurer, as well as the kzAA- Kazakhstan national scale rating.

The outlook revision balances Eurasia Insurance’s positive track record in improving the credit quality of its investment portfolio with volatile results and growing industry and country risks, S&P said.

The agency said it believes insurance companies in Kazakhstan will likely face further challenges in 2016, owing to the constrained economic prospects in Kazakhstan, GDP stagnation, a sharp devaluation of the Kazakhstani tenge in 2015.

Eurasia Insurance’s financial risk profile continues to be supported by solid capitalization, including extremely strong risk-based capital adequacy, S&P said.

Despite some improvements in the credit quality of Eurasia Insurance’s investment portfolio, the company’s risk position is still viewed as high, reflecting high currency risk with a long unhedged position in U.S. dollars, the agency said.

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