Fitch Ratings has affirmed Uzbekistan-based Uzagrosugurta Joint-Stock Company’s Insurer Financial Strength (IFS) Rating at 'BB-'. The Outlook is Stable.

The affirmation reflects Uzagrosugurta’s continuing state ownership. In addition, the rating reflects a record of capital support by the Uzbek state and the insurer’s systemic role in the agricultural sector in the country.

Uzagrosugurta scored 'Adequate' at end-2021 under Fitch’s Prism Factor-Based Model, an improvement from 'Somewhat Weak' at end-2020. The strengthening was due to decreased risk retention (inwards reinsurance is mainly ceded abroad), which helped to ease pressure on target capital, and to significant profit generation, which helped support available capital.

Uzagrosugurta’s investment portfolio is dominated by bank deposits placed with a fairly large number of state-owned and large private banks mainly in the 'B' and 'BB' rating categories. The company also has sizeable equity instruments - 21% of total invested assets at end-2021. Although these instruments are formally traded on the local stock exchange, Fitch views them as of low liquidity due to their modest transaction volumes. At the same time, Fitch believes the company’s ability to achieve better diversification by instrument or by the issuer is limited by narrow investment opportunities in Uzbekistan.

UzA