AM Best Revises Outlooks to Stable for Uzbekinvest Export-Import Insurance Company, JSC
April 26 2024 - 11:59AM
Business Wire
AM Best has revised the outlooks to stable from negative
and 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 Credit Ratings (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.
The revision of the outlooks to stable from negative reflects
improvement in the company’s risk-adjusted capitalisation. This is
due to increased sophistication of the company’s exposure
measurement of probable maximum loss. A revised assessment of the
company’s exposure to a 1-in-250 earthquake event, supported by
third-party analysis, has resulted in a stronger Best’s Capital
Adequacy Ratio (BCAR).
Uzbekinvest’s balance sheet strength is underpinned by
risk-adjusted capitalisation at the strongest level, as measured by
BCAR. AM Best expects the company’s BCAR scores to remain above the
minimum required for the strongest assessment level, with a
sufficient buffer to absorb potential shock losses. In addition,
the company has a relatively 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.
The marginal operating performance assessment considers
Uzbekinvest’s high combined ratio, with a five-year (2018-2022)
weighted average of 107.2%, 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. For 2023,
the underwriting results are expected to improve due to the company
achieving greater economies of scale, combined with better results
produced by its foreign book of business as compared with its
domestic portfolio. However, the sustainability of these
improvements is yet to be demonstrated.
Uzbekinvest’s limited business profile assessment reflects its
leading market position in the small, albeit growing, Uzbek
insurance market and nascent competitive position in its overseas
markets. Over the past three years, the company significantly grew
its inward reinsurance portfolio, which accounted for more than 50%
of gross written premium in 2023 and is primarily written outside
of Uzbekistan. The company has since slowed the growth of its
foreign portfolio, recognising the risks of international
reinsurance market exposure.
Uzbekinvest is majority owned by the Ministry of Investments and
Foreign Trade of the Republic of Uzbekistan. The company’s leading
domestic 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. For more information,
visit www.ambest.com.
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Stanislav Stoev, ACCA, CFA Senior Financial
Analyst +44 20 7397 0306 stanislav.stoev@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Michael Dunckley, CFA Associate Director,
Analytics +44 20 7397 0312
michael.dunckley@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com