Current State of the Insurance Market in Uzbekistan

Abstract

One of the most important achievements of Uzbekistan's development has been the formation of an insurance market environment and the elimination of the state monopoly on insurance. From the subsidiary sector of the economy, as insurance was in the years of Soviet power, insurance in Uzbekistan has been promoted to strategic positions over the past period. This is primarily due to the active state policy, in which the insurance market is considered by the state authorities as one of the main components of the market infrastructure of the country.

Over 2016-2022, gross accrued insurance premium increased more than 4 times and amounted to more than 1.4 trillion soums, and the insurance penetration rate for these years was in the range from 0.34 to 0.7%. During the above period, the insurance density varied from 6.7 to 15.3 USD. The loss ratio at the end of 2022 was over 23%. At the end of 2022, 41 insurance companies were operating in the insurance market of Uzbekistan, of which 8 - in the life insurance industry. Not all domestic insurance companies are active players in the insurance market, 7 insurers have a market share of less than 1% in terms of insurance premiums.

The insurance market of Uzbekistan is characterized by a very high geographical concentration. This is explained by the fact that although insurable objects are distributed throughout the territory of the republic, almost all financial flows are concentrated in the capital. The main share of insurance premium (more than 68%) is still formed in the city of Tashkent, which indicates the predominance of corporate insurance in the insurance portfolio of domestic insurers.

The current stage of development of the domestic insurance market is characterized by insignificant sizes of authorized capitals of insurers both in the general insurance industry and in the life insurance industry. The size of total authorized capital of insurance companies in Uzbekistan as of January 1, 2023 amounted to about 1.8 trillion in soum terms.

The state of the insurance market of Uzbekistan today is characterized by the following positive trends:

-high growth rates of total insurance premium volume (not less than 10% annually)

-presence in the market of 40 insurance companies in the general insurance industry, including three of them - with state-participation, which have been operating in the domestic insurance market for more than 20 years and are actually national brands - joint stock companies "Uzagrosugurta", "Kafolat" and export-import insurance company "Uzbekinvest", as well as 8 companies in the life insurance industry;

sufficiently high degree of insurers' presence through branches, representative offices and a network of insurance agents in all regions of the country;

availability of a large number of insurance agents (more than 7 thousand).