S&P Global Ratings has announced the assignment of a 'B+' financial strength rating to Apex Life Insurance, headquartered in Uzbekistan. The outlook for the rating is stable.
The rating reflects Apex Life's deep integration into the Apex Insurance group, its consequential reputational factors, and its pivotal role in the group's business expansion strategy for the years 2024 through 2026. Analysts anticipate that Apex Life will receive support from its parent company, Apex Insurance if required under any foreseeable circumstances. Consequently, the long-term rating on Apex Life aligns with the 'b+' group credit profile of Apex Insurance.
Established in May 2019 as a wholly-owned subsidiary of Apex Insurance, Apex Life specializes in term life insurance, endowment insurance, and accident and health insurance, both voluntary and obligatory. While Apex Life constitutes a small portion of Apex Insurance in terms of assets (4%) and capital (12%), it remains integral to the group's growth strategy. The life insurer plays a crucial role in the group's initiative for joint cross-selling, enhancing customer service quality, diversifying offerings, and expanding the retail clientele base.
Apex Life operates in close synergy with Apex Insurance across operational, strategic, and financial domains. It adheres to the same underwriting and claims controls as its parent company and receives board oversight on investment policy and risk management practices. Moreover, Apex Insurance leverages Apex Life as a platform to market policies to retail clients, amplifying the interconnectedness between the two entities.
In light of Apex Life's strategic significance, S&P Global Ratings anticipates that Apex Insurance would extend financial support if necessary. Apex Life received capital injections of UZS 14bn ($1.1mn) in 2023 and UZS 11bn ($875,787) in 2022 to facilitate business growth and strategy realization. Additionally, a letter of guarantee issued by Apex Insurance underscores its commitment to supporting Apex Life during distress scenarios.
The stable outlook on Apex Life mirrors that of Apex Insurance, reflecting the sustained importance of the former to the latter over the next 12 months. Any changes in Apex Life's group status would consequently impact its rating trajectory.
A negative rating action on Apex Life could ensue within the next year if pressure mounts on Apex Insurance's rating or if support from the parent company diminishes, particularly concerning capital injections. Conversely, a positive rating action on Apex Insurance could translate into an upward revision for Apex Life's rating.
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