AM Best Assigns Credit Ratings to Trust Insurance JSC

LONDON--(BUSINESS WIRE)--AM Best has assigned a Financial Strength Rating of C+ (Marginal) and a Long-Term Issuer Credit Rating of “b-” (Marginal) to Trust Insurance JSC (Trust Insurance) (Uzbekistan). The outlook assigned to these Credit Ratings (ratings) is stable.

The ratings reflect Trust Insurance’s balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, very limited business profile and weak enterprise risk management (ERM).

Trust Insurance’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which is expected to be at the adequate level as at year-end 2024, as measured by Best’s Capital Adequacy Ratio (BCAR). The balance sheet strength assessment considers the company’s asset quality, which, despite a conservative investment allocation by asset class, is constrained by the elevated financial system risk associated with Uzbekistan, where Trust Insurance’s assets are concentrated. Another partially offsetting rating factor is the company’s small capital base, which increases its sensitivity to volatility.

Trust Insurance is expected to build a track record of adequate operating performance. The company’s technical performance in its initial years of operation was influenced by its start-up nature, with combined ratios of 104.8% in 2023 and 111.9% in 2022, negatively impacted by elevated expense ratios (55.3% in 2023 and 66.4% in 2022). Trust Insurance is expected to report positive net income for 2024 in excess of UZS 4 billion (USD 320,000). While subject to execution risk, AM Best expects the company’s operating performance to improve as it executes on its plan and successfully scales up operations.

Trust Insurance is a relatively new player in the highly competitive Uzbek market, having started its operations in 2021. Despite significant growth in recent years, the company remains small, with gross written premium expected to be around UZS 150 billion (USD 12 million) in 2024. Trust Insurance’s very limited business profile assessment also factors in the company’s high geographic concentration as its business is currently sourced solely from Uzbekistan.

Trust Insurance’s weak ERM assessment reflects risk management capabilities that are at an early stage of development and largely not commensurate with the company’s risk profile.

These assigned ratings are the result of an accepted appeal from Trust Insurance.

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