Tashkent, Uzbekistan (UzDaily.com) -- Fitch Ratings has downgraded Uzbekistan-based Kafolat Insurance Company JSC (Kafolat)’s Insurer Financial Strength (IFS) Rating to ‘B+’ from ‘BB-’ and removed it from Rating Watch Negative (RWN). The Outlook is Stable. The rating actions follow the expected changes in ownership.

The downgrade of Kafolat’s rating reflects our reassessment of the impact of ownership on the rating to ‘neutral’ from ‘positive’, following the reduction in state ownership in Kafolat to below the majority stake level. As a result, Kafolat’s IFS rating is set at its Standalone Credit Profile (SCP) level of ‘b+’.

On 29 December 2021, UzAssets JSC Investment company, the Uzbek state management company, reached an agreement with Genesis Innovation LLC, at that time a minority stakeholder of Kafolat, on a sale of a state share of 69.29% in Kafolat, with a phased payment and transfer of shares. The sale of a state share in the authorised capital of Kafolat to a private investor was carried out as part of the state privatisation programme. As a result of the partial share purchase, the share of Genesis Innovation LLC in Kafolat’s authorised capital increased to 51.05% from 26.97% as of 1 January 2022.

Kafolat’s SCP reflects the insurer’s capital position, supportive of the rating, high investment risk, favourable business profile versus other Uzbek insurers, and positive financial performance.