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. A track record of solid internal capital generation has resulted in the accumulation of a large capital buffer to absorb potential volatility associated with Victoria’s exposure to an aggregation of risks and its challenging operating environment. Victoria purchases reinsurance on a facultative basis from international reinsurers 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. The ratings also factor in Victoria’s exposure to the high levels of economic, political and financial system risk associated with operating predominantly in Kazakhstan, as well as the current uncertainty around the impact on Kazakhstan’s economy from sanctions imposed on Russia in response to the conflict in Ukraine.

Victoria’s underwriting performance has been strong, as demonstrated by a five-year (2017-2021) weighted average combined ratio of 69.2% (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. In 2021, Victoria reported overall unaudited pre-tax earnings of KZT 7.2 billion (approximately USD 16.6 million), compared with KZT 9.4 billion (approximately USD 22.3 million) reported in the previous year, supported by high investment returns, reflecting the high inflationary environment in Kazakhstan. 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 2021 gross written premium (GWP), it has a market share of just 1.0%. In 2021, the company’s GWP totaled KZT 4.2 billion (approximately USD 9.6 million), down 6% from the previous year. The reduction was predominantly driven by actions taken by the company to reduce the size of its voluntary civil liability portfolio by applying stricter underwriting criteria.

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 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

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