CONTACTS:
FOR IMMEDIATE RELEASE
LONDON - MARCH 16, 2022 08:46 AM (EDT)
AM Best has affirmed the Financial Strength Rating of B (Fair) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “bb” (Fair) of Uzbekinvest Export-Import Insurance Company JSC (Uzbekinvest) (Uzbekistan). The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect Uzbekinvest’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, limited business profile and marginal enterprise risk management.
Uzbekinvest’s balance sheet strength is underpinned by risk-adjusted capitalisation at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). AM Best expects the company’s BCAR scores to remain comfortably above the minimum required for the strongest assessment, supported by good internal capital generation and low underwriting leverage. In addition, the company has a conservative investment allocation strategy, with approximately half of its investments held in bonds and other fixed income securities outside of Uzbekistan, which are predominantly of excellent credit quality. Offsetting factors include the company’s relatively unsophisticated capital management capabilities, as well as its quantification and management of catastrophe exposure.
The marginal operating performance assessment considers Uzbekinvest’s high combined ratio, with a five-year (2016-2020) weighted average of 117.6%, as calculated by AM Best. Whilst the non-life loss ratio is low, overall underwriting results are negatively affected by Uzbekinvest’s high expense base. The company is taking actions to reduce expenses by streamlining its operations. However, these actions are yet to yield material tangible results.
Uzbekinvest’s limited business profile assessment reflects its high geographic concentration in the small, albeit growing, Uzbek insurance market. The company’s premium is concentrated in Uzbekistan, where Uzbekinvest has a leading market position; however, in 2020, the company has started to grow its inward reinsurance business, which is primarily written in foreign markets.
Uzbekinvest is majority owned by the Ministry of Investments and Foreign Trade of the Republic of Uzbekistan. The company’s leading market position and the relative independence of operations from the state mean that no lift or drag is applied to its ratings.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.