The rating outlook improvement and the national scale rating revision followed the rating confirmation and rating outlook change for the parent company Freedom Holding Corp. from “Negative” to “Stable”, as well as the rating confirmation and rating outlook change for the holding's operating subsidiaries from “Negative” to “Positive”.
According to S&P analysts, FFL has demonstrated the resilience of its profitability and capital buffers since 2023, which compares favorably with its Kazakhstani peers with the same or higher ratings. The agency expects the company to maintain stable profits in 2024-2025.
The “Stable” outlook reflects the agency's expectations that FFL will continue to generate strong profits, maintain high capital buffers and sufficiently high asset quality in the next 12 months.
S&P Global Ratings: "We still think that JSC LIC Freedom Finance Life as a strategically important subsidiary of FRHC and continue to apply a three-notch markup towards FFL to the parent company’s rating in order to reflect the insurer's operational independence from the group. As the third largest life insurer in Kazakhstan by gross written premium, FFL has demonstrated exceptionally strong premium growth in 2023 and the 1HY 2024 year-on-year partly due to increase in borrower life insurance.
The agency expects FFL to continue to perform high profitability achieving a 15%-20% return on assets (ROA) and over 35% return on equity (ROE) in 2024-2025.
“Over the past five years, our company has made a huge breakthrough in the development of digital services in life insurance, as well as participation in ESG projects, such as financial literacy, social responsibility, art, culture, sports, environmental responsibility have brought the company to a new level. The sustainability of our business and the development of life insurance are closely linked to environmental, social and corporate aspects,” said Azamat Yerdessov, Chairman of the Board of LIC Freedom Life.
Photo is from open sources.
