AM Best Information Services

MARCH 10, 2022 12:42 PM (EST)

AM Best Affirms Credit Ratings of Halyk-Life, JSC

 Anna Sheremeteva
Financial Analyst
+44 20 7397 4397

Jessica Botelho-Young, CA
Associate Director, Analytics
+44 20 7397 0310

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644


LONDON - MARCH 10, 2022 12:42 PM (EST)
AM Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of Halyk-Life, Life Insurance Subsidiary Company of the Halyk Bank of Kazakhstan, JSC (Halyk-Life) (Kazakhstan). Halyk-Life is a wholly owned subsidiary of JSC Halyk Bank, a leading retail bank in Kazakhstan. The outlook of these Credit Ratings (ratings) is positive.

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

The positive outlooks reflect improvements in Halyk-Life’s operating performance results observed in recent years.

Halyk-Life’s balance sheet strength is underpinned by its risk-adjusted capitalisation that is assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR), based on unaudited year-end 2021 regulatory filings. AM Best expects the company’s prospective BCAR to remain at the strongest level, driven by solid operating results and a dividend policy that allows for sufficient earnings retention to support its growth plans.

Halyk-Life’s investment portfolio is relatively conservative by asset class, with fixed-income securities, cash and bank deposits accounting for approximately 90% of its investments as at year-end 2021. The ratings also factor in Halyk-Life’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 to Kazakhstan’s economy from sanctions imposed on Russia in response to the conflict in Ukraine.

Halyk-Life has reported improved operating performance in recent years, supported by solid investment returns, although the latter should be viewed in the context of the relatively high inflationary environment in Kazakhstan. In 2021, the company reported a return-on-equity of approximately 24% (2020: approximately 37%). AM Best expects Halyk-Life to build a track record of strong operating profitability prospectively, underpinned by the profitable growth of its life insurance book in 2021 and the actions taken to control its operating expenses. Future results could be challenged by the intense competition in the Kazakh life insurance market and the high regulatory risk in the country.

Halyk-Life is a leading insurer in Kazakhstan’s life insurance market, with an estimated market share of 32%, based on 2021 gross written premium. However, Halyk-Life’s operations are limited to its domestic insurance market, which is small by international standards. Nonetheless, the company is less dependent on third-party distribution channels as it has been historically, given its ability to leverage the relationship with Halyk Bank.

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.

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AMB# Company Name
091331 Halyk-Life, Life Insurance Subsidiary Co