AM Best has assigned a Financial Strength Rating of B (Fair) and a Long-Term Issuer Credit Rating of “bb” to Uzbekinvest Export-Import Insurance Company, JSC (Uzbekinvest) (Uzbekistan). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect Uzbekinvest’s balance sheet strength, which AM Best categorises 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, as measured by Best’s Capital Adequacy Ratio (BCAR), which is at the strongest level due to relatively low underwriting leverage. In addition, the company has a conservative investment strategy, with approximately half of its investments held in bonds and other fixed income securities, which are predominantly of excellent credit quality. Offsetting factors include the company’s unsophisticated capital management capabilities, as well as its quantification and management of catastrophe exposure.
The marginal operating performance assessment considers Uzbekinvest’s relatively high combined ratio with a weighted average of 115.4% reported for the 2015-2019 period. Whilst the non-life loss ratio is low, overall underwriting results are pressured by Uzbekinvest’s high expense base. The company is taking actions to reduce expenses by streamlining its operations, and there was a modest decrease in the expense ratio in 2020.
Uzbekinvest’s limited business profile assessment reflects its high geographical concentration in the small, albeit growing, Uzbek insurance market. The company has a leading market position in Uzbekistan and has plans to diversify into neighbouring markets through inward reinsurance.
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.
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