S&P: Russia and Kazakhstan will continue to depend a lot on the western reinsurance market

USD 3.6 billion is the reinsurance capacity of the Russian market, while in Kazakhstan the capacity is of USD 1 billion, Ekaterina TOLSTOVA, Associate Director, S&P Global Ratings said in Almaty.

Speaking at the XIth edition of the International Conference "Insurance in Central Asia", in the capital city of Kazakhstan, the S&P's representative shared the rating agency's view on the main re/insurance markets in the region, Russia and Kazakhstan.

According to S&P, the main features worth mentioning at this time are:
  • Up to this moment, the unique reinsurance market in the EEU has not been created
  • Russia and Kazakhstan hold the majority stake of the premiums in the EEU
  • Great Britain, Germany, France etc. are the main countries where the most of the premiums from EEU countries are ceded in reinsurance. We should mention that China and India also became very active in this regard
  • Russia is ceding to Kazakhstan 5% from the total volume of the reinsurance premium ceded abroad, while Kazakhstan is ceding only 1% from its reinsurance premiums to Russia, due to rating restrictions that are imposed by the National Bank in Kazakhstan;
  • The first 10 companies in Russia hold 70% of all the premiums ceded in reinsurance, in Kazakhstan this percentage is more than 80% for the first 10 players
  • Russia and Kazakhstan still depend a lot from the western reinsurance market and no changes are expected in the near future
  • USD 3.6 billion - the capacity of the Russian market (to absorb in reinsurance), while in Kazakhstan the capacity of the market is of USD 1 billion
  • S&P estimations for the near future are:
  • The international reinsurance market remains soft; reinsurance tariffs are decreasing, as well as prices;
  • the operational indicators of the reinsurers are worsening, with the combined ration value expected to exceed 100%
  • capitalization of the companies and risk management will be the main subject for the next years




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