LONDON, April 28, 2023–(BUSINESS WIRE)–AM Best has revised the outlooks to negative from stable 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 negative from stable reflects pressure on Uzbekinvest’s balance sheet strength, due to the expected deterioration of the company’s risk-adjusted capitalisation at year-end 2022 (audited financial statements are yet to be finalised). This is due to the company’s significant business growth, combined with its lack of sophisticated accumulation management. The company is taking steps to re-build the buffers within its risk-adjusted capitalisation and to improve its exposure management. However, should the company fail to meet the capital requirements of its growing book of business, a rating downgrade is likely.

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 above the minimum required for the strongest assessment, albeit with a lower buffer to absorb potential shock losses. 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.

The marginal operating performance assessment considers Uzbekinvest’s high combined ratio, with a five-year (2017-2021) weighted average of 117.9%, as calculated by AM Best. Whilst the non-life loss ratio is low, overall underwriting results are negatively affected