The international rating agency Fitch Ratings confirmed the financial rating of Kafolat Insurance JSC in Uzbekistan at BB- on October 23, 2026, while maintaining a positive outlook.
This rating reflects the company's strong business profile, established market position, and good diversification. Furthermore, Fitch notes a high level of capitalization, a conservative investment strategy, and stable, albeit volatile, financial results.
The positive outlook is driven by the potential for further improvement in the assessment of the company's business profile, its capitalization, investment risks, and asset risks. This forecast followed an upgrade by Fitch of the industry profile and operating environment for insurers in Uzbekistan.
The agency attributes this decision to the strengthening of sovereign and macroeconomic conditions, increased resilience of the banking sector, stricter regulation, and growing transparency in the insurance industry.
Capital Assessment and Financial Indicators
According to Fitch's Prism model, Kafolat's capital position was assessed as strong by the end of 2025, contrasting with the 'adequate' assessment the previous year and 'moderately weak' at the end of 2023.
Nevertheless, the company's regulatory solvency buffer decreased from 273% as of the end of 2025 to 161% by the end of the first half of 2026. Fitch explains this drop due to rapid growth in insurance premiums, which consumed capital faster than profits could replenish it. The agency expects the solvency buffer to remain above the regulatory minimum thanks to accumulated profits.
Fitch assesses Kafolat's business profile as strong compared to other insurers in Uzbekistan. The company has a significant presence in incoming reinsurance and has improved its geographical diversification, particularly by reducing its exposure to the United States during 2024–2025.
Property insurance constitutes the largest share of the portfolio. In addition, the company provides liability insurance, auto insurance, accident insurance, and medical insurance, while its life insurance subsidiary contributes less to overall diversification.
Return on equity fell to 14% in 2025 compared to an exceptionally high figure of 64% in 2024. Fitch links this decline to losses from currency fluctuations, increased volatility in insurance results, and the impact of financial expenses under IFRS 17 standards.
The combined expense ratio was 74%. In the first half of 2026, net profit according to national standards amounted to 15.9 billion sums, equivalent to an annual return on equity of 12%.
Investment Activities and Prospects
Kafolat's investment portfolio is concentrated in cash and bank deposits, primarily in state and large private banks in Uzbekistan. Risky assets accounted for 2.6% of capital at the end of 2025.
However, Fitch noted the limited depth of Uzbekistan's domestic investment market and the concentration of investments in one medium-sized bank without a credit rating.
The rating may be upgraded if Kafolat's business profile improves, provided the company maintains sound financial performance and capitalization. Conversely, a weakening of the business profile or the inability to maintain the current level of capital and profitability could lead to a change in the outlook to 'Stable'. The rating may also be downgraded if the company's capital assessment under the Prism model falls below the 'adequate' level.
