Baku, Azerbaijan, Feb. 27
By Azad Hasanli - Trend:
In 2018, Azerbaijan-based AzInsurance OJSC (AzInsurance) reduced the share of compulsory motor third party liability (MTPL) insurance and increased the volume of property insurance, Trend reports with reference to Fitch Ratings.
As a result, the insurer’s loss ratio improved to 27 percent in 2018 from 43 percent in 2017, according to the report.
Fitch Ratings has revised Azerbaijan-based AzInsurance OJSC's (AzInsurance) Outlook to Stable from Negative and affirmed its Insurer Financial Strength (IFS) Rating at 'B'.
The revision of the outlook reflects AzInsurance’s stronger than expected financial performance in 2017 and the absence of adverse reserve development based on the recently issued audited 2017 IFRS reporting.
The rating continues to reflect the company’s relatively strong capital position, its weak business position and high risk in the investment portfolio.
In its audited IFRS accounts for 2017, AzInsurance reported a net loss of 0.6 million manats.
In its unaudited regulatory accounts for 2018, AzInsurance reported a strong improvement of net profit to 4.7 million manats, which benefited from a strong investment income of 4 million manats.
Fitch notes that the quality of AzInsurance's investment portfolio has moderately improved, but remains relatively low.
At end-2018, 49 percent of the insurer's investment portfolio was placed with banks of relatively weak credit quality.
In 2018 the insurer started to cede the management of approximately half of its investment assets to AzFinance Investment Company CJSC. These are predominantly placed in Azerbaijan government bonds.