The net profit of Standard Life insurance company as of 2017 was KZT 729.3 mln, which is 59.9% higher 2016 results (KZT 456.0 mln). The growth of the company's profit was mainly associated with a significant reduction in commission expenses (-1.4 billion Tenge) and a decrease in reserves under insurance contracts (-1.5 billion Tenge).
In the meantime, the net earned premiums of the company as of 2017 decreased by 34%, from 6.2 billion tenge to 4.1 billion tenge. Reduction of premiums is due to the termination of the agency agreement with a major insurance agent, a legal entity, under which the agent mediated the conclusion of insurance contracts on behalf and upon authorization of the company. Net insurance premiums in the whole sector have increased by 11.3% to KZT266.6 bln last year.
The company's assets increased by 16.2% to KZT24.4 bln. The main increase in the active part of the balance sheet fall on bank accounts and deposits (+2.8 billion tenge), reverse RPs (+1.2 billion tenge) and fixed assets (+0.5 billion tenge). Bank deposits (KZT18.0 bln. or 74% of assets) account for 87.4% of the company's total investments, and are mostly placed in Second Tier Banks with credit ratings from В- to В +. It should be noted that financial assets for sale have decreased by KZT1.2 bln; this is due to sale of 100% of the package of Eurobonds of Kazakhstan banks with a credit rating from BB- to BB +. According to the National Bank of Kazakhstan, as of start of year the company's assets accounted for 2.6% of the total assets of the sector.
The company's total liabilities showed an increase of 14.9% to KZT20.0 bln. Reserves under insurance contracts, which account for 98% of all liabilities, have increased from KZT 16.9 billion to KZT 19.6 billion (+ 16%). There is an increase in the reserve of retained earnings by 80% to KZT1.8 bln.; that had a positive impact on equity, which increased by the appropriate amount to KZT4.4 bln. We note that the company's share capital has not changed and is 2.6 billion tenge.
As of start of April 2018, the main shareholder of the company is Kumpeisov D. D., who owns 22.47% of the company's total shares. However, a year earlier the portfolio of this shareholder was 53.7%. Stock of shares of other 10 shareholders varies between 7.48% and 8.03% of the shares.
Recent rating actions: on March 13, 2018, Fitch rated Standard Life with a “B” rating, "Stable" prognosis. According to Fitch, the company's ratings reflect a weak business profile of Standard Life, the exposure of the insurance portfolio to long-term risks, a high investment risk and a low match of assets and liabilities structure, which is offset by the company's strong position in terms of regulatory solvency.