Tashkent, Uzbekistan (UzDaily.com) -- Fitch Ratings has upgraded AGROS HAYOT Joint-Stock Insurance Company’s (Agros Hayot) Insurer Financial Strength (IFS) Rating to ‘BB-’ from ‘B+’. The Outlook is Stable.

The upgrade reflects Fitch’s revised view of Agros Hayot as a ‘Core’ subsidiary to its 100% parent state-owned Uzagrosugurta JSC (BB-/Stable). As a result of this assessment of strategic importance, the IFS Ratings of Agros Hayot’s IFS rating is now aligned with Uzagrosugurta’s at ‘BB-’.

Our reassessment follows the receipt of new information, which we included in the analysis. First, Agros Hayot is now deemed an integral part of Uzagrosugurta in supporting the implementation of the latter’s development targets, according to a government decree. This is despite Agros Hayot not being formally listed in the list of strategic state-owned companies that the Uzbek state has committed to support and develop, whereas Uzagrosugurta is on the list.

In particular, Agros Hayot has been made part of Uzagrosugurta’s transformation road map as per a Presidential decree issued in October 2020 aimed at modernising major state-owned companies in areas such as transparency and governance, in various sectors of the economy. To comply with the transformation requirements for its parent, Agros Hayot has recently changed its legal form to a joint-stock company from a limited liability company.

Furthermore, Fitch understands from management that the government has significant influence over Agros Hayot’s key corporate decisions, which are taken at the level of Uzagrosugurta’s supervisory board, including six representatives of the local cabinet of Ministers and various government bodies and one independent director. Agros Hayot also intends to play a prominent role in the provision of insurance coverage for Uzbekistan’s migrant labour force, a recently government-enforced line of business.

A further factor underpinning the ‘Core’ assessment is the recent rebranding of Uzagrosugurta and Agros Hayot to UzInsurance and UzLife, respectively. Brand sharing is a component of our analysis when assessing strategic importance in achieving group objectives.

Lastly, our view is supported by a strong history of support, synergies through the offer of a full range of non-life and life products to the same franchise base, subsidiary’s material size relative to the whole group and unlikely divestiture of the subsidiary despite its weak operating performance.