Tashkent, Uzbekistan (UzDaily.uz) — International rating agency Fitch Ratings affirmed the financial strength rating of Uzbekistan’s Kafolat Insurance JSC at BB- on 23 October 2026, maintaining a Positive Outlook.
The rating reflects the company’s strong business profile, established market position and good diversification. Fitch also cites strong capitalisation, a conservative investment strategy and sound, although volatile, financial performance.
The Positive Outlook reflects the potential for further improvements in assessments of the company’s business profile, capitalisation, investment risks and asset risks.
The outlook follows Fitch’s upgrade of its assessment of the industry profile and operating environment for insurers in Uzbekistan. The agency attributed the decision to stronger sovereign and macroeconomic conditions, greater resilience in the banking sector, tighter regulation and increased transparency across the insurance industry.
Under Fitch’s Prism model, Kafolat’s capital position was assessed as strong at the end of 2025, compared with adequate a year earlier and moderately weak at the end of 2023.
However, the company’s regulatory solvency margin fell from 273% at the end of 2025 to 161% at the end of the first half of 2026.
Fitch attributed the decline to rapid growth in insurance premiums, which consumed capital faster than profits replenished it. The agency expects the solvency margin to remain above the regulatory minimum, supported by retained earnings.
Fitch assesses Kafolat’s business profile as strong relative to other insurers in Uzbekistan. The company has a significant presence in inward reinsurance and has improved its geographic diversification, including by reducing its exposure to the United States in 2024–2025.
Property insurance accounts for the largest share of its portfolio. The company also provides liability, motor, accident and health, and financial risk insurance. Its life insurance subsidiary makes a smaller contribution to overall diversification.
Return on equity fell to 14% in 2025 from an exceptionally high 64% in 2024. Fitch attributed the decline to foreign exchange losses, increased volatility in insurance results and the impact of finance expenses under IFRS 17.
The combined ratio stood at 74%. In the first half of 2026, net profit under national accounting standards reached 15.9 billion soums, equivalent to an annualised return on equity of 12%.
Kafolat’s investment portfolio is concentrated in cash and bank deposits, primarily with state-owned and large private banks in Uzbekistan. Risky assets accounted for 2.6% of capital at the end of 2025.
However, Fitch highlighted the limited depth of Uzbekistan’s domestic investment market and the concentration of investments in a single mid-sized bank without a credit rating.
The rating could be upgraded if Fitch’s assessment of Kafolat’s business profile improves while the company maintains sound financial performance and capitalisation.
A weakening business profile or an inability to sustain current capital and profitability levels could lead to the outlook being revised to Stable. The rating could be downgraded if the company’s capital assessment under the Prism model falls below adequate.
