UZBEKISTAN: Fitch affirms Uzagrosugurta at BB-

23 August 2023 — Marina MAGNAVAL
Fitch Ratings affirmed the financial strength of Uzagrosugurta and its life insurance subsidiary Agros Hayot at BB- with a Stable outlook, the agency said.

The affirmation reflects the fact that the company remains under state ownership (Uzbekistan, National Currency Long-term Issuer Default Rating: 'BB-'/Stable Outlook). In addition, the rating reflects the insurer’s importance for the agricultural sector of the country, the report says.

The company's standalone credit profile reflects improved capitalization, favorable yet volatile financial performance and high investment risk. The insurer also has significant catastrophic risks in the agricultural insurance portfolio, although these risks are partially mitigated by the presence of a "stop-loss" mechanism for crop insurance by the state.

Agros Hayot's ratings reflect its role as a key entity for its sole shareholder, Uzagrosugurta, which entails equalizing the ratings of these two companies.

Capitalization of Uzagrosugurta improved from "adequate" to "strong" at the end of 2022, supported by a revaluation of fixed assets and a high level of regulatory solvency margin. Despite weak profitability from insurance activities and high investment risk, the company demonstrates favorable results and capital strengthening.