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AM Best Affirms Credit Ratings of Victoria Insurance Company JSC

AM Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of Victoria Insurance Company JSC (Victoria) (Kazakhstan). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Victoria’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and weak enterprise risk management.

Victoria’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), and its relatively conservative and liquid investment portfolio. Although in 2022 the company made a material one-off dividend payment, Victoria has a track record of good internal capital generation. This has resulted in the accumulation of a large surplus buffer to absorb potential volatility associated with the company’s exposure to an aggregation of risks and its challenging operating environment. AM Best does not expect further significant capital extractions in the medium term, as per the company’s strategy. Victoria purchases reinsurance from international companies of high credit quality, but it does not have catastrophe reinsurance protection in place, which is an offsetting rating factor given the company’s exposure to earthquake risk in Kazakhstan.

Victoria’s underwriting performance has been strong, as demonstrated by a five-year (2018-2022) weighted average combined ratio of 70.9% (as calculated by AM Best). However, technical results have been volatile due to a frequently changing underwriting strategy and low frequency, high severity claims in its liability book of business. In 2022, Victoria reported overall unaudited pre-tax earnings of KZT 9.6 billion (approximately USD 20.7 million), compared with KZT 7.2 billion (approximately USD 16.5 million) reported in the previous year, which were supported by high investment returns, reflecting the high interest rate environment in Kazakhstan and globally. AM Best expects Victoria’s operating performance to remain strong, albeit potentially volatile, due to exposure to changes in the value of investments denominated in the U.S. dollar as a result of foreign currency exchange fluctuations.

Victoria has a limited business profile as a small non-life insurer operating solely in Kazakhstan’s fragmented and competitive insurance market. Based on 2022 gross written premium (GWP), it is ranked No. 12 among 17 non-life insurers with a market share of 2.0%. In 2022, the company’s GWP increased more than two times compared with the previous year, reaching KZT 10.3 billion (approximately USD 22.3 million). The growth was predominantly driven by a material fronting arrangement, under which Victoria cedes voluntary motor and property risks to a local reinsurer.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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