Tashkent, Uzbekistan (UzDaily.com) -- Fitch Ratings has upgraded Uzbekistan-based Kafolat Insurance Company JSC (Kafolat)’s Insurer Financial Strength (IFS) Rating to ‘BB-’from ‘B+’. The Outlook is Stable.

The upgrade follows Fitch assigning Uzbekistan Long-Term Foreign- and Local-Currency IDRs of ‘BB-’ with a Stable Outlook.

The equalisation of Kafolat’s rating with that of the sovereign reflects Fitch’s view of a high propensity of the Uzbek authorities to provide support to the insurer in case of need, the agency said.

Kafolat’s business profile benefits from the insurer’s ownership. The state controls 93% in Kafolat, with the Ministry of Finance the main shareholder owning 66.51%. Kafolat is one of three state-owned non-life insurers in Uzbekistan. The other two are the non-life leader with a focus on agriculture and an export credit agency that also writes regular non-life insurance business. Kafolat has not had a specific role, but was intended to write a broad range of traditional retail and commercial non-life insurance lines.

A change in Fitch’s view of the financial condition of Uzbekistan is likely to have a direct impact on Kafolat’s rating.

Sustained reserving deficiencies or underwriting losses leading to operational losses or capital depletion could lead to a downgrade.