AM Best Assigns Credit Ratings to PASHA Insurance OJSC

AM Best has assigned a Financial Strength Rating of B++ (Good) and a Long-Term Issuer Credit Rating of “bbb” (Good) to PASHA Insurance OJSC (PASHA Insurance) (Azerbaijan). The outlook assigned to these Credit Ratings (ratings) is stable. PASHA Insurance is wholly owned by PASHA Holding LLC (PASHA group), a diversified investment holding group in Azerbaijan.

The ratings reflect PASHA Insurance’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management (ERM).

PASHA Insurance’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which is expected to remain at the strongest level in the medium term, as measured by Best’s Capital Adequacy Ratio (BCAR), albeit with a somewhat limited buffer. The company has a history of high dividend payout ratios, which has limited the growth of its capital base. The assessment is supported by the company’s conservative investment allocation with a good level of liquidity. However, the asset base has a notable concentration in Azerbaijan, which exposes the company to the high economic, political and very high financial system risks. The ratings also consider PASHA Insurance’s moderate reliance on reinsurance; however, the associated credit risk is mitigated partly by a stable reinsurance panel of excellent credit quality.

PASHA Insurance has a track record of strong operating results, evidenced by a net/net combined operating ratio of 87.5% and a return on equity of 43.8% in 2024 (87.6% and 40.2% in 2023, respectively). Investment results have supplemented earnings with an 8.8% investment yield in 2024 (2023: 7.9%).

PASHA Insurance’s business profile is supportive of its limited assessment. While the company is the market leader in the domestic non-life market, its business portfolio is subject to geographical and product concentrations. PASHA Insurance has undertaken steps in recent years through internal and external resources to improve its governance and ERM framework. The company’s ERM is considered to be appropriate relative to its risk profile.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings Assessments

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit http://www.ambest.com.

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Contacts:

Stanislav Stoev, ACCA, CFA

Senior Financial Analyst

+44 20 7397 0306

[email protected]

Valeria Ermakova

Associate Director, Analytics

+44 20 7397 0769

[email protected]

Christopher Sharkey

Associate Director, Public Relations