Moody’s affirms B2 rating of “KAFIL-SUG‘URTA”; outlook stable

Tashkent, Uzbekistan (UzDaily.com) — Moody’s Ratings has affirmed the insurance financial strength ratings (IFSR) of “KAFIL-SUG‘URTA” JSC in both local and foreign currency at B2. The outlook remains stable, the agency reported.

According to Moody’s analysts, the ratings reflect the company’s solid market position: “KAFIL-SUG‘URTA” ranked seventh among non-life insurers by net premiums and ninth by gross premiums, holding around 3% of the market in 2024.

The agency pointed to the company’s diversified product mix balanced between corporate and retail segments, its many years of profitability, and an adequate level of capital relative to insurance risks. Extensive use of reinsurance also plays a significant role in mitigating potential losses.

At the same time, Moody’s highlights the company’s concentration within a small domestic economy and the developing nature of Uzbekistan’s insurance market, as well as the volatility of underwriting results and a large share of assets rated below investment grade.

Gross written premiums of “KAFIL-SUG‘URTA” increased to UZS 286 billion in 2024 from UZS 175 billion a year earlier, raising the company’s market share to 3% from 2.3% in 2023. Geographic diversification remains minimal, with virtually all premiums generated in Uzbekistan.

The portfolio continues to shift toward the retail segment, which accounted for about half of net premiums. Meanwhile, the high proportion of microloan credit insurance — around 25% of net premiums — remains a risk factor, though reinsurance partly offsets this exposure.

The company’s asset structure is marked by high concentration in state-owned local banks rated Ba3. According to Moody’s, bank instruments accounted for about 39% of assets — equivalent to 180% of capital — at the end of 2024. The agency does not expect significant changes in the investment portfolio over the next 12–18 months due to limited opportunities in the local market.

“KAFIL-SUG‘URTA’s” equity rose from 39 billion soums in 2023 to 66 billion soums in 2024, exceeding 90 billion soums in 2025. Capitalization indicators are assessed as adequate: the gross underwriting leverage improved to 4.6x in 2024 from 5.9x the previous year. Capital growth was supported by both profits and additional shareholder contributions.

In 2024, the company posted a net profit of 9.5 billion soums, up from 2.6 billion soums in 2023, lifting return on equity to 11.3% from 3.9%. The improvement was driven by stronger investment earnings, although underwriting profitability remained under pressure due to rising operating and commission expenses, resulting in a combined ratio above 100%.

According to unaudited results for the first nine months of 2025, net profit increased to 15 billion soums from 5.8 billion soums a year earlier.

The stable outlook reflects Moody’s expectation that the company will maintain profitability and that asset quality, capitalization, and liquidity will not deteriorate.

The agency notes that an upgrade is possible if the company further strengthens its capital, delivers sustained profitability with a combined ratio below 100%, and if Uzbekistan’s macroeconomic environment improves.

A downgrade could occur if capitalization weakens significantly, asset quality deteriorates, the company takes on greater risk, or if adverse economic trends emerge in the country.