16 Kazakh Insurance Companies Possess Financial Certification Mark
OREANDA-NEWS. August 28, 2013. 16 Kazakhstan insurance companies have a certification mark of the world’s largest rating agencies. Assessments issued by global agencies range from B to BB+. In accordance with the world classification, the B rating reflects business solvency of companies, stable financial state of affairs and different risks. The rating of any Kazakh company is refrained by the country’s rating. At the same time, Kazakh insurers say that they are satisfied with these assessments.
Boris USMANOV, CHAIRMAN OF BOARD, EURASIA INSURANCE COMPANY: - Such high ratings as AA and AAA imply very high limits of responsibility. This is why, it is very difficult to have the AA rating, since you will be responsible for 500 million US dollars and will have certain obligations in case of loss.
Kazakhstan received the rating in early 2000s and after that banks and large enterprises started receiving ratings from international rating agencies. Insurance companies received the first ratings from world rating agencies seven year ago. In addition, insurance companies are spending large sums of money for obtaining high international assessments.
Boris USMANOV, CHAIRMAN OF BOARD, EURASIA INSURANCE COMPANY: - Although receiving ratings from authoritative rating agencies is quite expensive, it is better than buying a new car, new building or spend a lot of money for television advertising. Talking about exact figures, ratings in international agencies will cost several dozen thousand US dollars but it will never exceed 50 thousand US dollars annually.
Rating agencies reported that they occupy about 95% of the global rating market, where 40% falls at S&P, 39% at Moody’s and 16% at Fitch. Kazakhstan companies appeal to head of international agencies.
Boris USMANOV, CHAIRMAN OF BOARD, EURASIA INSURANCE COMPANY: - Everything depends of the volume of the company. Rating agencies would like to sell their products and I believe that they are offering a system of discounts for small companies. I believe that small companies are paying about 10-20 thousand US dollars annually.
Independent experts say that although analysts of international rating agencies claim that they have deep analytical knowledge and rich experience necessary for proper assessment of business solvency of borrowers, the practice often shows that agencies are making mistakes, which result in financial losses of investors.