Insurance Co. Jusan Garant JSC

The stable outlook reflects our expectation that Jusan Garant will maintain its competitive standing together with good underwriting performance, a sufficient capital cushion at least at the 'A' level, and an average investment portfolio quality of 'BBB-'. We see a negative scenario as unlikely unless Jusan Garant materially weakens its standards for asset allocation with average invested asset quality falling to 'BB', or we see that losses or excessive growth materially pressure the company's capital adequacy. We also see a positive scenario as unlikely at this stage, considering the company's rapid premium growth, still-modest capital size, and comparability with bigger players. However, we could consider a positive rating action in the medium term if we saw further improvements in Jusan

...S&P Global Ratings expects Insurance Company Jusan Garant JSC's (Jusan Garant's) capital adequacy will deteriorate to the 'A' level, under our model, in 2021-2022 on the back of double-digit premium growth this year. Due to rapid premium growth, we expect weakening of the insurer's capital adequacy from excellent levels in the past. That said, we consider this level to be sufficient for the current business growth strategy and still supportive of the rating. We expect Jusan Garant to maintain positive underwriting performance on the back of cost-optimization measures and substantial premium growth. We expect a slight increase in the combined ratio (loss and expense) to 95% in 2021 due to an increase in the loss ratio and still-high expense ratio of close to 58% on a five-year average (50% market average for the same period). Jusan Garant has continued to demonstrate sustainable improvements in asset quality in 2020 and 2021 to date. We note the improving weighted-average credit quality...

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